Even though shares have lost more than 2 percent since Thursday’s closing price, Harley-Davidson Inc
Acknowledging the potential for higher economic growth, “which is gripping the market,” RBC Capital Markets analysts Joseph Spak and Jacob Hughes upgraded the stock from Underperform to Sector Perform, boosting their price target from $46 to $57 to account for a higher multiple than the one they used in their previous model.
The Trump Administration
Could a Trump presidency bail out Harley-Davidson’s shipping strategy and inventory?
While there is no way to know, the analysts recognize the odds look higher than they used to. Trump’s policies including increased infrastructure spending and tax reductions could stimulate growth and, consequently, consumer spending.
Furthermore, the growth in construction jobs that could derive from the increased infrastructure spend “plays squarely into HOG’s core consumer (…) While there is still uncertainty as to what gets implemented, the potential for improved growth trajectory appears present."
RBC analysts wouldn’t go after the stock, and still believe that, at current levels, investors could perceive more downside than upside. Having said this, they admitted they were wrong on their previous stock call and are now cutting their losses.
|Nov 2016||RBC Capital||Upgrades||Underperform||Sector Perform|
|Oct 2016||RBC Capital||Maintains||Underperform|
|Sep 2016||Jefferies||Initiates Coverage on||Hold|
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