Morgan Stanley Sees Muted Demand Trends Weighing on Harley-Davidson (HOG)

Harley-Davidson, Inc. (NYSE:HOG) is included among the 14 Best Mid-Cap Dividend Stocks to Buy Now.

On January 16, Morgan Stanley cut its price target on Harley-Davidson, Inc. (NYSE:HOG) to $18 from $21, while keeping an Underweight rating on the stock. In its 2026 outlook note, the firm said gaming, lodging, and leisure trends were “muted” in 2025, with the few pockets of stronger momentum mostly tied to companies serving older and wealthier customers. Looking into 2026, Morgan Stanley expects “more of the same fundamentally,” though it noted that interest rate dynamics could tilt spending back toward goods over services.

Back in November, Harley said it planned to tighten inventory levels and pivot toward more affordable motorcycles in order to counter the impact of tariffs at a time when demand had been cooling. The company has also continued to hold back its full-year forecast due to ongoing uncertainty around tariffs. Traditionally, the company has relied heavily on its higher-income customer base and the sale of higher-margin custom cruisers. Now, however, it is shifting focus toward lighter, more modern, and more affordable bikes aimed at younger riders.

A key part of that strategy is the new “Sprint” model, which is expected to launch in 2026 with a starting price below $6,000. Harley CEO Artie Starrs said younger buyers want something that’s fun and has some seriousness to it, but not as serious as how Harley has been positioning itself historically.

Tariffs remain a major pressure point. The company reported a $27 million tariff charge for the quarter, up from $13 million in the previous quarter, as it navigates US President Donald Trump’s broad tariff policies on parts and critical imports, including components like semiconductors. Even so, Harley narrowed its expected annual tariff impact to $55 million–$75 million, compared with its earlier range of $50 million–$85 million. Starrs added that retail demand has been difficult, and noted there is a “lot of work ahead.”

Harley-Davidson, Inc. (NYSE:HOG) designs, manufactures, and sells its iconic motorcycles, along with apparel, parts, and accessories, while continuing to build one of the most recognizable lifestyle brands tied to freedom, adventure, and classic American style.

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