Harley-Davidson Tumbles as Analysts See Threat to Market Share

  • ITG lowers first-quarter U.S. retail unit sales estimate
  • Longbow cites tough competition from Polaris's Indian brand

Harley-Davidson Inc. tumbled the most in more than five months after two analysts said the motorcycle maker may have lost market share in the first quarter.

The shares fell 7.5 percent to $46.10 at 12:07 p.m. in New York after dropping as much as 9.5 percent, the biggest intraday slide since Oct. 20. The stock’s decline was the steepest in the Standard & Poor’s 500 Index.

John Tomlinson, an ITG Research analyst, estimated in a report that Harley’s quarterly U.S. retail sales fell as much as 7 percent to 32,995 motorcycles. That followed a report on Tuesday by David Macgregor, a Longbow Research analyst, that said Polaris Industries Inc.’s Indian brand had a strong quarter and probably cut into Harley’s market share

Harley’s 2015 revenue trailed analysts’ estimates as the Milwaukee-based company faced price cuts by competitors and unfavorable currency exchange rates. Chief Financial Officer John Olin said at a March 9 investor conference that discounting Harley’s motorcycles would be “shortsighted” and threaten the brand.

“We don’t think the share losses are sustainable based on just price discounting,” Jaime Katz, an analyst at Morningstar who has a hold rating on the stock, said in a phone interview. She said she sees opportunity for Harley to grow in markets such as Brazil and China where it has recently languished.

“It’s a near-term phenomenon that should alleviate itself over time,” she said.

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