div style=”text-align: justify;”Somewhat surprisingly we have several firms out positive on span style=”font-weight: bold;”Harley-Davidson (NYSE:HOG)/span following Analyst meeting:br /br /span style=”font-weight: bold;”- Baird is raising their target to $28 (prev. $21) and reiterating Outperform rating after the firm talked with management/dealers in meetings in Denver. /spanThey believe the turnaround story is building momentum led by a credible CEO with impressive credentials. Beyond the standard Harley noise – they advise investors to focus on the strength of the brand, opportunities to lower structural cost, and ideas to finance HDFS in better ways. Details were limited, but Baird believes the turnaround story will attract investment.br /br /span style=”font-weight: bold;”Summary. /spanThe presentation lacked tangible goals or meaningful metrics, leaving investors to overweight intangible clues – which were bullish. Firm notes they like that management is addressing structural cost, cutting dealer inventory, boosting residual values, refining the dealer network, exploring options for HDFS, and offering investors a more credible outlook. As the turnaround unfolds, they expect investors to demand more tangible metrics – but initial impression is favorable.br /br /span style=”font-weight: bold;”Brand./span Dealers tell the firm more bikes are selling below MSRP, which diminishes the value of the brand. Management acknowledged this problem and vowed to protect the brand at all costs, starting with plans to slash production announced in earlier this month. Baird expects days inventory to drop to 75-90 days from 90-110 days, potentially creating short waiting lists again. Naturally, residual values should improve – which has favorable implications for HDFS.br /br /span style=”font-weight: bold;”Cost. /spanThe Harley-Davidson brand is among the best on the planet, but its operations fall short of world-class. CEO Keith Wandell brings impressive operational credentials to Harley, understands its shortcomings, and has the mandate to make the tough decisions. They expect the York negotiations to set the tone.br /br /span style=”font-weight: bold;”HDFS. /spanManagement considers HDFS a strategic asset, but acknowledges the need to lower its cost of capital. We’d like to see HDFS partner with third-party underwriters to drive fee income without capital risk (CarMax model). The topic of HDFS remains an insurmountable hurdle for some investors that otherwise might buy the stock – but believe the issue is diminishing.br /br /span style=”font-weight: bold;”- Deutsche Bank is raising their target to $26 (prev. $21) /spannoting that although management did not convey any optimism regarding the near term outlook for motorcycle demand, they came away more confident in HOG’s ability to maintain recent market share gains and return the business to historic margin levels. Firm maintains their Buy recommendation based on valuation and HOG’s additional cost savings potential.br /br /Management conveyed a number of data points which suggest that the company’s recent market share gains could be more durable than we perceived (HOG appears to have made significant progress in improving its brand’s positioning with young adults). The firm was also pleased to hear management reiterate their commitment to supporting prices and residuals, by aggressively curtailing production. Maintains Buy rating.br /br /span style=”color: rgb(255, 0, 0);”Notablecalls: /spanIt’s quite odd to see so many positive things being said about HOG. Yet, the short interest still stands close to 20% in the name. The chart looks like it wants new highs in the $24 range. Won’t get there today but I suspect there is upside in the name today. span style=”font-weight: bold;”S/spanspan style=”font-weight: bold;”ay..3-5% or a full 1 pt if you will. /span/divdiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’https://blogger.googleusercontent.com/tracker/29297569-5310205413631953646?l=notablecalls.blogspot.com’//div

Last 5 posts by Notable Calls

• Petroquest Energy (NYSE:PQ): Compelling Valuation with Near-Term Catalysts; Upgrading to Overweight - J.P. Morgan - October 29th, 2009
• 15% correction coming in SP500? - October 21st, 2009
• Boeing (NYSE:BA): Downgraded to Underweight at Morgan Stanley, target to $43 - October 20th, 2009
• Par Pharmaceuticals (NYSE:PRX): Upgraded to Overweight at Barclays; target raised to $30 - October 15th, 2009
• Wyndham Worldwide (NYSE:WYN): Upgraded to Buy at Goldman Sachs; $26 target established - October 7th, 2009