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Harley-Davidson's Electric Bike LiveWire Sees Soft Demand

Zacks Equity Research

Harley-Davidson, Inc. HOG electric motorcycle, LiveWire, is witnessing lower demand. Due to a hefty price of $29,900 and the model’s limited range, dealers are struggling to sell the electric motorcycles. Additionally, the company shipped the bikes almost two months late, which left just a month for dealerships in the Midwest and East to promote the model before the winter lull in bike sales.

The target market for high-tech LiveWire is young, environmentally conscious customers.

It appears that management has miscalculated the demand for LiveWire. The company anticipated the sale of the electric bikes to lead it to its former glory. Instead, it is predicted to witness more declines.

With motorcycles losing its appeal, especially among the youth, Harley-Davidson motorbike sales are witnessing a decline. The firm is having difficulty attracting new buyers as millennials do not value the motorcycle status symbol. As millennials prefer convenient modes of transportation and ridesharing platforms like Uber, they don’t see owning motorcycle, electric or others, as an attractive option. Thus, the company’s retail sales have been declining domestically as well as internationally.

Harley-Davidson has been witnessing declining sales trend for the past four years. Its sales are anticipated to decline in fiscal 2019 as well.

Notably, over the past year, its shares have underperformed the industry it belongs to. Over this period, shares of the company have declined 17.4% against the industry’s growth of 5.4%.

Zacks Rank & Stocks to Consider

Harley-Davidson currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Auto-Tires-Trucks sector are BRP Inc DOOO, currently sporting a Zacks Rank #1 (Strong Buy), and Lithia Motors LAD and CNH Industrial N.V. CNHI, carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has an expected earnings growth rate of 17.2% for 2019. The company’s shares have gained 49.3% year to date.

Lithia Motors has an expected earnings growth rate of 12.9% for 2019. The company’s shares have gained 64.4% year to date.

CNH Industrial has an estimated earnings growth rate of 6.2% for 2019. Its shares have gained 11.4% year to date.

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