Deutsche Bank analyst Rod Lache attributes Harley-Davidson's Q1 earnings beat to the timing of costs with marketing plans getting pushed out of the quarter to Q2. Underlying trends remain challenging with motorcycle EBIT declining in Q1, Lache tells investors in a research note. He raised his price target for Harley shares to $47 from $44 and keeps a Hold rating on the name.
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Harley-Davidson continues to expect: HDMC revenue flat to down 9% and operating income margin of 12.6%-13.6%, HDFS operating income flat to up 5%, LiveWire electric motorcycle unit sales of 1,000 to 1,500 and Harley-Davidson capital investments of $225M-$250M.
Morgan Stanley assumed coverage of Harley-Davidson with an Overweight rating and $50 price target. Harley-Davidson is an iconic brand with leading market share in the U.S. motorcycle industry and "a fiercely loyal customer base," says the analyst, who believes a refocused strategy under new leadership, along with strong capital allocation discipline, will lead to upside to consensus earnings estimates.