HOG - Baird builds caution on Harley Davidson after inauspicious dealer survey

Checks with Harley-Davidson ( NYSE: HOG ) dealers ahead of the company’s third quarter report left Baird with a less bullish outlook, according to a note released on Wednesday.

The research note reflected frustration among dealers about persistently lean inventory levels and slowing sales amid a tougher macro backdrop. Additionally, after-effects of the production halt in the spring are apparently still being felt, with an expected backlog of shipments and sales not being realized.

“One dealer told us, ‘The only trend adversely impacting retail sales is the Motor Company's continued inability to ship new MY2022 units as scheduled. We are still awaiting shipment of new units that were scheduled to be shipped in June - inexcusable!’,” the note read.

72% of dealers contacted said the inventory levels remain too low, while many more lamented the missed opportunities in terms of summer sales. Overall, the survey reflected significantly negative sentiment among dealers on the 3-5 year outlook for sales.

Given these dynamics, Baird reduced EPS estimates for the coming quarters, while reassessing the value of LiveWire, which it warned will remain volatile. The firm took its price target to $35 from a prior $45, but retained an “Outperform” rating on the stock.

Shares of Harley Davidson ( HOG ) fell 2.24% shortly before the market close on Wednesday. The decline on the day lowered the stock into the red on a year to date basis.

Read more on LiveWire Group’s ( LVWR ) recent market debut .

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