Investing.com -- Morgan Stanley downgraded Harley-Davidson (NYSE: HOG ) to "Equal-Weight" on limited upside despite expected improvements in affordability in 2025.

Analysts noted that absolute affordability remains high, while muted consumer confidence may constrain demand recovery.

“We struggle to have conviction in a bull argument of normalized earnings power as prolonged affordability challenges,” said Morgan Stanley (NYSE: MS ) analyst adding that it could indicate a structural shift in the demand curve that may be difficult to overcome with current cost efficiency plans.

The downgrade follows a tough 2024 for the powersports sector, with HOG and peers underperforming the broader market by 53% amid negative retail trends and inventory de-stocking.