It turns out millennials don’t “live to ride” like their parents and grandparents did.

Alliance Bernstein downgraded Harley-Davidson (HOG) to market performance from outperform Wednesday following results from a

recent survey that predicts no growth in bike sales as millennials enter HOG’s target demographic.

 

The call is “based on increased conviction that motorcycle demand in the US is in the throes of secular erosion, combined with weakened

conviction in the materialization of near-term catalysts,” wrote AB analyst David Beckel in Wednesday’s note.

 

“Our data suggests the younger Gen Y population is adopting motorcycling at a far lower rate than prior generations,” Beckel added. “Gen

Y’s are aging into the important ‘pre-family’ cohort of riders and Boomers are increasingly handing over their keys to the smaller Gen X

population.”

 

Correcting its previous prediction, Alliance Bernstein set its new 12-month price target lower at $55, representing six percent upside. It

previously expected a 20 percent gain in the next year.

 

“For a variety of reasons, we now believe it is hard to imagine a scenario in the medium term where unit sales growth in the US breaches

0% on a consistent basis,” continued the analyst.

 

Since Alliance Bernstein’s initiation 10 months ago, new bike sales have persistently missed due to demographic shifts. Declines in pre-family

(aged 25-35) and post-family (aged 45-70) cohorts show millennials, the largest age group outside of boomers, have little interest in riding

motorcycles.

 

“We estimate rider growth has declined from a 3-5% annual growth pace pre-financial crisis to close to 0% today,” noted Beckel.

If our back-tested model is predictive of the future, we expect rider growth will dip into negative territory in 2017 and stay in negative

territory for at least the next five years.”