Harley shares roar yet again

Updated: 6:50 p.m. ET

This is a loud, lovely time to be a shareholder of Harley-Davidson (HOG).

The shares jumped 10.5% to $31.37 today after RBC Capital Markets analyst Edward Arnold raised his target for the stock to $36 from $32.

The stock was the second-best performer in the Standard & Poor's 500 Index ($INX). Volume topped 10.4 million shares, nearly three times the average for the stock over the last three weeks.

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And, thanks to continued talk (and little more than that) about a takeover, the stock has jumped 41.1% in less than two months.

Maybe the talk of a leveraged buyout bid from Kohlberg Kravis & Roberts will materialize. Reuters says at least one analyst believes an offers is unlikely.

In the meantime, Arnold likes Harley.

Retails sales generally are firming up, he wrote clients today. Auto sales have improved, and pricing for motorcycles has firmed.

As a result, he thinks Harley-Davidson's first-quarter earnings, due April 20, could reverse a recent trend of earnings disappointments.

So, do you buy Harley? Maybe. But the stock is now pricey. It's selling at 17 times forward earnings and 105 times trailing earnings.

Plus, as Michael Brush noted recently, it's got problems. The economy has exacted a big toll.

Plus, the Corporate Library thinks its governance is lacking. It staggers directors' terms, and many board members have direct relationships with the company.

The result may be that the company's management isn't pushed hard enough.