NEW YORK (AP) — A Wedbush analyst on Monday downgraded Harley-Davidson Inc. to "Neutral" from "Outperform," saying it appears that unusually wet weather lowered motorcycle sales through much of the second quarter.
Rommel Dionisio, who also cut his price target by $5 to $68, said his firm checked in with more than 60 dealers and many of them noted that rainfall was significantly harder during the recent quarter than they were a year ago, which reduced customer traffic, especially in the Northeast and Midwest.
But the talks with dealers also pointed to a better sales mix, boosted by strong sales of more expensive custom bikes, he said.
"Nonetheless, relatively flat industry trends for the seasonal peak spring and early summer season will be difficult to make up," Dionisio wrote in a note to investors.
The analyst also noted that in addition to the major Japanese motorcycle makers, Milwaukee-based Harley faces new competition from Polaris Industries Inc.'s Indian brand and Piaggio's Moto Guzzi brand, which could eventually take a bite out of its dominant share of the heavyweight motorcycle market.
Harley spokesman Bob Klein declined comment, saying that the company doesn't discuss analyst reports.