Trends simply have not been friends with the motorcycle making legend Harley-Davidson Inc. (NYSE: HOG). With younger buyers not wanting to own cars in many circumstances, the dangers of motorcycles are all well too known. The company also recently announced layoffs and had a management shuffle as it deals with a deep recession.

After a six-year decline in the share price, is it finally time to buy Harley-Davidson stock? That’s what one Wall Street analyst is telling its customers.

Keep in mind that no analyst call, no matter how strong a case is made and no matter which firm the call comes from, should ever be used as the sole source used to decide to buy or sell a stock. Analyst calls often provide valuable insight, but investors need to make their own decisions and to look into the aspects of a company independently.

James Hardiman of Wedbush Securities has upgraded Harley-Davidson shares to Outperform from Neutral. The official price target was raised to $36 from $27 as well. That represents roughly 25% upside from the $28.87 prior closing price, and it is significantly higher than the 8% to 10% implied upside to an analyst target price typically issued on S&P 500 and most other large-cap stocks.

What is interesting about this call in particular is that Wedbush has been among the most vocal critics of Harley-Davidson. Hardiman has had a Neutral rating since at least mid-2017, back when the stock was above $50. It’s possible that this could be one of many analysts who change their views, if the underlying trends prove to hold up heading into 2021.

Hardiman now believes April unit sales were down by approximately 40%, followed by May’s sales down low double-digits. The issue here is that the analyst noted that June sales were up by low double-digits. He also reported that more of the firm’s contacts are now complaining of insufficient inventories than at any time during the 14 years the firm has been conducting Harley-Davidson dealer surveys.

Wedbush’s 2020 pro forma earnings estimate was lifted $0.20 per share to $1.61, and that is over $0.50 above consensus. The bulk view is that second-quarter production stoppages mean that the third quarter will be strong. Wedbush’s 2021 pro forma estimate was raised a more significant $0.46 per share to $3.35, and that is close to $1.00 ahead of consensus.

With the company’s significant “Rewire” cost savings announced in the prior week, Hardiman believes Harley-Davidson has even more cost savings opportunities down the road, if its new management team can bring operating expenses down to a more reasonable level. On top of higher earnings in 2021, Wedbush’s view calls for an earnings multiple expansion. The current valuation (without using the firm’s price target) would currently be only about 8.6 times the firm’s 2021 earnings estimate and about 12.2 times consensus earnings estimates.

With demand and margin growth opportunities abound, it appears that the company is taking advantage of the pandemic by cleaning up some of its biggest deficiencies. It lists these as follows:

1. An overabundance of used bike availability leading to a historically large price gap and adverse used-to-new sales ratio
2. New bike inventory drift at the dealer level
3. A cost structure more appropriate for 2015 demand levels than those of 2020

Losing a vocal critic with a new high upside was working for Harley-Davidson shares on Thursday. The stock was up just over 2% at $29.45, in a 52-week range of $14.31 to $40.89. Its consensus analyst target price from Refinitiv was also lower at $26.92.

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