The brokerage firm also noted an inventory surplus
Baird downgraded Harley-Davidson Inc (NYSE:HOG) to “neutral” from “buy” earlier, with the analyst in question citing lackluster retail guidance for the third quarter and an inventory surplus. In addition, the brokerage firm slashed its price objective on the equity to $40 from $44.
HOG was last seen down 3.6% to trade at $36.65 in response. The security once again came short of the $40 level last week, which also rejected its April rally. Harley-Davidson stocks sports only a modest year-to-date lead, but in the past 12 months has added 14.3%.
There’s room for additional pessimism among the brokerage bunch, with six of 11 firms in coverage sporting a “buy” or better rating coming into today. Shorts are already in control, however, with the 9.81 million shares sold short making up 7.5% of the stock’s available float.
Puts have been overwhelmingly popular of late. This is per HOG’s 10-day put/call volume ratio of 14.38 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all annual readings.
Options are attractively priced right now, per the stock’s Schaeffer’s Volatility Index (SVI) of 36% that ranks in the 21st percentile of the past 12 months. Plus, its Schaeffer’s Volatility Scorecard (SVS) sits at 83 out of 100, meaning it’s often exceeded options traders’ volatility expectations in the past year.