09:23 AM EDT, 10/27/2025 (MT Newswires) -- Harley-Davidson ( HOG ) is facing competitive pressures, low pricing power, and weak secular trends which are working against a cyclical recovery for the motorcycle industry, Morgan Stanley said in a Monday note.

In the leisure products and services category, Morgan Stanley analysts said they expect overall consumer spending to slow, weighed down by sluggish payrolls and a rising savings rate. Although lower interest rates are expected to help support spending, especially on larger durable goods like appliances or vehicles, tariff-driven inflation poses a risk to margins and discretionary spending.

Harley-Davidson's ( HOG ) estimates are likely to come down, the analysts said, leading to a cautious view on the company's stock. They said would be more optimistic if new leadership succeeds in revitalizing the brand sooner than expected, if the broader economic backdrop becomes more favorable, and better inventory and cost management drives a stronger rebound in the margins.

Morgan Stanley downgraded Harley-Davidson ( HOG ) stock to underweight from equal-weight and reduced the price target to $25 from $27.