Harley Davidson Just Got a Downgrade from Wells Fargo Over This

A weak market and tariff concerns prompted Wells Fargo to lower its rating on Harley-Davidson this week.

The bank lowered its rating on the motorcycle giant to “market perform” from “outperform” on Monday citing a weakness in the market for large motorcycles, tariff uncertainty, and a “long road to stabilization.”

He did however lift his price target from $40 to $41.

“As demographics and consumer preferences shift, large heavyweight motorcycles, regardless of brand, remain challenged,” said Wells Fargo analyst Timothy Conder.

“We believe HOG’s plans for mid/small bikes, growing ridership, bringing in younger demographics to the brand and international expansion (led by Asia), collectively should provide meaningful growth opportunity over time,” he added.

According to Conder, there is a risk of tariffs on any motorcycle imports to Europe, regardless of where they are made.

He wrote, “As demographics and consumer preferences shift, large heavyweight motorcycles regardless of brand, remain challenged with ongoing new/used pricing/supply dynamics and structural shift towards mid-size/smaller units.”

The analyst did note that the company is making the right moves by trying to reach out to younger demographics and grow its Asia business.

Disclaimer: We have no position in Harley-Davidson Inc. (NYSE: HOG) and have not been compensated for this article.