Harley-Davidson: Motorcycle Demand Struggles To Find a Trough, Pressuring Operating Margin Potential

We lowered Harley-Davidson’s moat to narrow from wide in 2024. We still see brand equity stemming from a long history of innovation, manufacturing experience, and a dealer network that has given Harley a dominant position in the US motorcycle market. However, we think its brand intangible advantage has declined in recent years, lowering our conviction in Harley’s ability to maintain market share and prevent operating margin degradation, resulting in more tepid economic profits ahead.