: Harley-Davidson’s stock jumps 4% premarket after D.A. Davidson upgrades it to buy from neutral ahead of Q2 earnings

Harley-Davidson Inc.’s stock HOG rose 4% in premarket trade Friday, after D.A. Davidson upgraded the stock to buy from neutral and said it expects second-quarter retail sales are better than feared. ” Heading into HOG’s earnings release next week, we believe HOG is poised to exceed increasingly low expectations around retail, 2Q23 earnings and their 2H23 outlook,” analyst Brandon Rolle wrote in a note to clients. The analyst raised his price target to $47 from $38. Feedback from dealers was more positive in the latest round than in early May, and they reported that April was likely the worst month of the quarter, after which retail started to pick up. Dealers also made strong progress in reducing excess inventory, said Rolle. “On average, dealers indicated MY22 inventory accounted for less than 10% of their new bike inventory exiting June,” he wrote. “Multiple dealers indicated they were actually light on new bike inventory entering July, as HOG was more disciplined with their 2Q23 U.S. shipments and dealers were aggressively liquidating used inventory.” Other positives include greater-than-expected pre-order demand for the company’s new CVO product launch, which dealers report has exceeded Harley-Davidson’s expectations. The stock has fallen 12% in the year to date, while the S&P 500 SPX has gained 18%.

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