Baird improved Harley-Davidson stock from “neutral” to “above average”.
The shares of Harley-Davidson Inc (NYSE: HOG) rose 7.3% to $ 40.29 this morning after Baird moved from neutral to outperform. This is the first time since 2016 that the analyst has been optimistic about the stock, noting a promising change in strategic direction and lower inventory levels. Meanwhile, Wedbush also got involved and raised its price target from $ 42 to $ 43.
Analysts still have plenty of room to follow Baird’s lead as the 12-month consensus price target of $ 38.25 represents a discount of nearly 5% on current levels. In addition, nine of the 13 analysts in the reporting viewed HOG as a “hold” to date.
Today’s price move has resulted in HOG hitting its highest level in nearly two months, closing the bear gap in early February and bringing recent pressures to its 80-day moving average. The stock is an impressive 112.7% ahead of the previous year and aims to close the month of March with a solid 13% gain.
While short interest has declined, further decoding of the stock could bring even more wind to the back. Short rates fell 8.8% over the last two reporting periods, although the 16.64 million short stocks sold accounted for a solid 10.9% of HOG’s available float and it would take nearly eight days to hit their average daily trading speed are covered.
Shifting the option pits could also give HOG a boost. On the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX), Harley-Davidson stock has a 10-day put / call volume ratio of 2.17, which is over 79 % of the measured values of lies in the last 12 months. This means that puts are picked up much faster than usual.
For those looking to speculate on the stock’s next move, options can currently be offered at a relative bargain price. This corresponds to the Schaeffer volatility index (SVI) of the share of 46%, which is in the very low fifth percentile of its annual range. In other words, options traders are currently anticipating low volatility expectations for the motorcycle manufacturer.