Jefferies warned Tuesday that Harley-Davidson may have trouble expanding its customer base more than investors expected. Analyst Anna Glaessgen began covering the stock for underperformance with a price target of $39, which implies an 18.6% drop from Monday’s closing price. Shares of Harley-Davidson were down 1.7% in the pre-market. “Simply put, we lack confidence in the future demand trajectory for the heavy-duty motorcycle segments,” she said in a note to clients. “We see the argument that ‘getting old’ is exhausting (‘getting old’ is an often overlooked nuance), although we do not see a clear catalyst for accelerating passenger growth through five years. 2030 as management outlined at the May analysis.” The brand has become the definition of American motorcycles, with demand this year driven by the lifestyles of long-travelers. day. Glaessgen said Harley-Davidson sold a certain “lifestyle” in line with American ideals that produced loyalists. In the fourth quarter, Harley-Davidson’s stock jumped 38%, outpacing the S&P 500’s 10.4% gain. Glaessgen said the company has also seen an improvement in profit margins that the company has seen. Some claim to be providing meat for the rotation argument. Harley-Davidson is up 27.1 percent in 2022, becoming one of the few non-energy stocks to post double-digit positive growth in a year defined by major declines. The new management has cut costs and improved the market and earnings per unit, Glaessgen said, adding that investors have confidence in the stock and are intrigued by the narrative of its resistance. broad-based bearish market sentiment. But Glaessgen said the “recent retail craze lacks authenticity,” noting that stock optimists underestimate the challenge of growing a consumer base. She is particularly interested in the company’s projections that future growth in its consumer base will come in part from the expansion of electric motorcycles, as the company forecasts more than 100,000 units. in 2026. That is considered too “optimistic” considering the company has registered less than 200,000 new units. total number of motorcycles by 2021. “We believe that growing and expanding passenger numbers beyond core will be easier said than done,” she said. “We see too great an enforcement risk to a significant strategic shift that comes from Harley’s loyal base who like Harley the way it is.” The company expects to grow a total of more than 700,000 per year from 2022 to 2023 compared to around 600,000 in 2012 to 2021, so the miss out on e-scooters could dampen growth expectations. broader growth. These growth hopes will likely also be dampened by increased competition in the e-motorcycle division as well as changes in consumer spending during a recession. Consumers have increasingly diverted spending from expensive goods to services after two years of shopping caused by the pandemic. And many have cut spending due to concerns about inflation and the growing risk of a recession. — Michael Bloom of CNBC contributed to this report.