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Why Are Analysts Uncertain about Harley-Davidson?

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Recommendations on Harley-Davidson

According to the latest Bloomberg consensus, 19% of analysts covering Harley-Davidson (HOG) have given the stock “buy” recommendations, while 76.2% of analysts have given it “hold” recommendations. Only one analyst among the total of 21 analysts recommended a “sell.”

Most Wall Street analysts might be maintaining neutral to negative views on Harley-Davidson because the company’s margins have been falling gradually and there’s been visible stagnation in its largest market, the United States.

Investors should pay attention to analysts’ recommendations, as they may affect the company’s stock price movements. If popular analysts change their views, significant short-term movement in the stock’s price could occur.

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Target prices

As of July 13, 2016, Harley-Davidson’s consensus 12-month target price was $50.09, with an upside potential of just ~2.4% from its market price of $48.91.

Among all popular analysts, Robin Farley of UBS has the highest price target of $57 on the company, which represents an upside potential of ~27%. Patrick Archambault of Goldman Sachs expects Harley-Davidson to underperform the broader market. He’s given HOG a low price target of $47.

Recommendations for auto companies

As of July 14, 2016, analysts had the following 12-month return potential estimates for mainstream auto companies (FXD):

  • 33.3% of analysts gave Honda Motor Company (HMC) “buy” ratings, reflecting ~13.8% upside potential.
  • 45.5% of analysts gave General Motors (GM) “buy” ratings, reflecting ~18.4% upside potential.
  • 33.3% of analysts gave Ford Motor Company (F) “buy” ratings, reflecting 6.9% upside potential.
  • 56.3% of analysts gave Ferrari (RACE) “buy” ratings, reflecting 12.2% upside potential.

Continue to the next article to find out analysts’ estimates for Harley-Davidson’s revenues in 2Q16 and beyond.

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