Baird upgraded Harley Davidson (HDI) to outperform from neutral.
Analyst David Cumberland says the current valuation is attractive in view of the company's consistent record, good visibility, and above-average growth potential. Cumberland says the stock may be reacting to a lack of increase in 2003 production guidance.
He notes management cited capacity constraints until its expanded York facility ramps up in the second half of 2003 as a factor for holding his guidance. Cumberland raised the 2003 earnings per share estimate by seven cents to $2.18, below the $2.22 consensus, on higher margin assumptions.
At about 19.5 times the 2003 earnings per share estimate, the stock trades at the low end of a three-year range.