Citi recommended buying Harley-Davidson stock. Are the tough times behind us?

Citi Investment Bank has recommended that investors buy shares of iconic motorcycle manufacturer Harley-Davidson ahead of the release of its quarterly results. Analysts believe now may be a good time to invest in the company. It is recovering from a multi-year slump, and they predict this trend will continue.

Citi upgraded Harley-Davidson’s stock rating from “hold” to “buy,” according to CNBC. Analysts also raised their price target for the motorcycle manufacturer’s shares by 6.5% to $33. The new target implies a 34% upside relative to the closing price on October 2.

Amid a rating revision, Harley-Davidson shares rose 3.3% in premarket trading on October 5. They are up 20% year-to-date.

After years of declining sales, which led to a 41% plunge in Harley-Davidson’s stock price since the end of 2022, the company’s recovery is gaining momentum, explains Citi analyst James Hardiman. He highlighted the positive trend in the company’s retail sales in North America this year: in the first quarter, sales rose 14% year-over-year to 23,800 motorcycles, and in the second quarter, they increased 3% to 29,750 units.

Strong momentum continued in July and August; furthermore, the latest estimates from Citi suggest that growth in September may have reached double digits, according to CNBC. “If these figures are confirmed, Harley could significantly exceed current expectations and end the year with its strongest retail sales figures in recent years,” the network quotes Hardiman as saying.

Along with the release of its second-quarter results, the manufacturer announced an upward revision to its annual sales forecast: from 130,000–135,000 to 133,500–138,500 motorcycles.

“We believe now may be a good time to invest in [the company] ahead of the earnings release,” Hardiman concludes. CNBC expects Harley-Davidson to report its quarterly results on October 28.

Analysts generally take a neutral stance toward the company: ten of them have assigned a “hold” rating to its stock, five more believe it is a buy, and four recommend reducing holdings. The average target price is $27.8, which is 13% above the last closing price.