Harley-Davidson (HOG): Goldman Sachs Checks Suggest Softer Nov.

Goldman Sachs analyst Patrick Archambault said channel checks suggest a softer November Harley-Davidson (NYSE: HOG) due to weather. Despite softness, he maintained his Buy rating and $81 price target.

"Based on our channel checks we estimate that Harley Davidson retail bike sales grew in the low-to-mid single-digit range in November. This suggests a slight deceleration from the mid-to-high single digit increase we estimate for October. We note more variance in November answers as compared to answers we received in our previous channel checks. The take rate for new models remains broadly positive and pricing for used bikes continues to hold up, even though we saw a slight downtick from the previous month," said Archambault.

"Color we received from different dealers suggests there was a slow start of the month due to weather – with traffic coming back towards the last weekend of November – as colder temperatures in certain regions came earlier than last year. Some respondents also talked about tight inventories of certain models being a slight headwind. Customer feedback for the new models, specifically the Road Glide and new Street 750/500 bikes, has been mostly positive but there appears to be some disparity in overall interest for the two bikes. While the Road Glide seems to be one of the best-sellers across the board, interest for the Street is more concentrated in metro areas and with new riders," continued the analyst.

"Although the November retail number points to a slight deceleration from October, we continue to expect 4Q14 retail sales growth in mid to high single digits supported by; new product, a tailwind from improving blue collar employment, and easing comps and we still expect HOG to deliver at the top end of its 270k-275k shipment guidance," he added.

For an analyst ratings summary and ratings history on Harley-Davidson click here. For more ratings news on Harley-Davidson click here.

Shares of Harley-Davidson closed at $66.42 yesterday.

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