• Harley Davidson "is engaging in a rather risky PR strategy," Morgan Stanley said Friday.
• The motorcycle brand this week pushed back on President Donald Trump's quickly intensifying trade war with Europe.
• Shares sank more than 8% after Harley said new European tariffs would cause a "tremendous cost increase."
• Follow Harley-Davidson's stock price in real-time here. 

Harley-Davidson already sank 8% this week after the motorcycle maker announced new tariffs from the European Union will cause a "tremendous cost increase," and Morgan Stanley says the company's problems go far beyond any import taxes."

In a note to clients Friday, the bank said Harley's decision to move some production of Europe-bound choppers overseas seemed unlikely.

"Will HOG really move production to Thailand or India to make its bikes for the EU market? We are not convinced," Adam Jonas, the bank's automotive analyst, said. "While manufacturers have long justified producing near end markets to mitigate taxes, logistics costs, and FX volatility… we don’t see Harley-Davidson deploying significant capital to produce significant volume of products in Asia for import into the EU as a medium-term or long-term solution."

Morgan Stanley remains overweight on the stock, with a price target of $53 — $1 lower than its previous target, but still 28% above where the stock was trading Friday.

Still, Harley worries the company "is engaging in a rather risky PR strategy" by calling out President Donald Trump, who triggered the European tariffs by levying a tax on imported steel and aluminum earlier this summer.

"Even before the tariff developments, estimates are depressed for company specific reasons that are very well known," Jonas said. "We believe that these serious issues (e.g. negative demographic trends) are rather long-lived and overshadowing powerful economic forces that should work in HOG's favor."

12% slump in US sales in its most recent earnings report." Harley is in the midst of a decade-long turnaround plan that's aimed at finding new, younger riders to convert to the Harley brand, hopefully resulting in higher sales. The company saw a 12% slump in US sales in its most recent earnings report.

Morgan Stanley says that while international sales are an important element of the company's growth plan — Europe accounted for 38% of the brand's sales in 2017 — its the US fan base that will keep Harley in business.

"We see the company's reaction to the tariff underscores a few risks to this strategy beyond potential global trade conflicts. Investors must appreciate that international expansion will likely be driven by a lower mix products,hitting incremental margins," Jonas said.

Harley-Davidson is down 18.8% this year.