Harley-Davidson's Stock Drops After Analyst Cuts Rating, Price Target

Harley-Davidson Inc.'s slid 1.7% in premarket trade Wednesday, after the motorcycle maker was downgraded at RBC Capital Markets, which cited concerns over continued soft retail sales trends. Analyst Joseph Spak cut his rating to sector perform, after being at outperform for the last nine months. He lowered his stock price target to $59, which is 4.1% above Tuesday's closing price, from $66. Spak is worried that either shipments need to be cut this year, or an overstocking situation could develop. He's also concerned about increasing competition and the lack of clear potential sales catalysts. He said valuation "isn't onerous," but believes "improving retail trends...are necessary for new money" to be invested. The stock has slumped 14% year to date through Tuesday, while the S&P 500 has gained 1.1%.