Harley-Davidson Inc. HOG. -0.38% stock rose 4% on Friday in premarket trading after D.A. Davidson said that it expected second-quarter retail to be better than feared and upgraded the stock from neutral to buy. Analyst Brandon Rolle wrote to clients that “we believe HOG will exceed the increasingly low expectations in retail, 2Q23 results and their 2H23 forecast” when it releases its earnings next week. The analyst increased his price target from $38 to $47. Dealers’ feedback was more positive than it was in early May. They also reported that the retail market started to improve after April. Rolle said that dealers also made significant progress in reducing their excess inventory. He wrote that dealers reported MY22 inventories accounted for on average less than 10% their new bike stock as of June. “Multiple dealers indicated they were actually light on new bike inventory entering July, as HOG was more disciplined with their 2Q23 U.S. shipments and dealers were aggressively liquidating used inventory.” Other positives include greater-than-expected pre-order demand for the company’s new CVO product launch, which dealers report has exceeded Harley-Davidson’s expectations. The stock is down 12% year-to-date, while the S&P500 SPX -0.68% is up 18%.