"HOG has solid management and execution, but we worry about motorcycle demand peaking, rising credit mix, and a possible inflection in revenue per unit," the firm wrote in an analyst note.
The Milwaukee, WI-based motorcycle maker has demonstrated solid execution due to its higher gross margin and free-cash-flow conversion among peers, efficient working capital management and steady dividend growth, according to Jefferies.
But "we worry about record-high US motorcycle penetration, rising mix of financing, credit losses normalizing and slowing volume growth," the firm said.
Additionally, the company's premium brand and "no discount" strategy will require additional spend to bolster sales and maintain share.
"HOG screens as undervalued, but we remain cautious as we may be late in the cycle," Jefferies noted.
Shares of Harley-Davidson closed lower on Thursday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B- on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share and expanding profit margins.
The team believes its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: HOG