Shares of Harley-Davidson (HOG) are in focus after a Wells Fargo analyst upgraded the stock to Outperform, saying it doesn't feel the secular decline in motorcycle sales has ended, but that investors may not be appreciating the benefits of tax reform.

HARLEY INVESTORS NOT APPRECIATING TAX REFORM BENEFITS: On Monday, Wells Fargo analyst Timothy Conder upgraded Harley-Davidson to Outperform from Market Perform and raised his price target for the shares to $59 from $49. Investors are not appreciating the benefits of tax reform to Harley-Davidson, Conder said. He believes a "significant portion" of the company's incremental capital from lower taxes will likely be returned to shareholders. Well understood secular headwinds and the likely continuance of "uninspiring" U.S. retail sales trends have brought a "resultant valuation disconnect," which provides a buying opportunity for investors, Conder argued.

"UNDERWHELMING" INTEREST: Separately, RBC Capital analyst Joseph Spak raised his price target on Harley-Davidson to $54 from $51, citing the anticipated benefits from the U.S. tax reform. However, the analyst noted that retail trends in the space were soft in Q4, likely leading to a sales decline of 5%-7%. Spak also said his dealer checks suggest that consumer interest in the new MY18 lineup has been "largely underwhelming." The analyst kept a Sector Perform rating on Harley-Davidson, adding that the focus will be on FY18 outlook and the management's chance to "rebuild credibility" with a more conservative shipment guidance.

PRICE ACTION: Harley-Davidson was up 0.5%, or 25c, to $53.25 in morning trading.