NEW YORK (AP) -- Shares of Harley-Davidson tumbled Tuesday and UBS removed its short-term "Buy" rating for the motorcycle company, citing slower sales.
THE SPARK: Robin Farley maintained her long-term "Neutral" rating and cut her price target for the Milwaukee-based company by $4 to $39.
THE BIG PICTURE: Despite the slow economic recovery, Harley posted a 7.5 percent increase in U.S. sales for the second-quarter. Its results for the quarter easily beat Wall Street predictions. It was also the first time since the recession that more Americans bought Harleys.
But, in the months since, worries about a double-dip recession and weakening consumer confidence have increased, which could hurt the company's third-quarter sales.
THE ANALYSIS: Farley initiated a short-term "Buy" rating for Harley-Davidson Inc. in the spring, predicting double-digit U.S. sales increases for May and June, but things have changed since then, she said.
"We believe Harley's U.S. retail sales growth has slowed as comparisons have become more difficult in August on a peak-to-trough basis," Farley wrote in a note to investors issued late Friday.
The analyst said she thinks Harley's U.S. retail sales rose just 2 percent to 3 percent in August, after three-straight months of double-digit growth.
SHARE ACTION: Down $2.10, or 5.8 percent, to $33.90 in midday trading. Meanwhile, the Dow Jones Industrial Average fell 233 points, or 2 percent, to 11,007.