Could Harley-Davidson Stock Continue to Impress in 2017?

Jitendra Parashar - Author

Dec. 4 2020, Updated 10:52 a.m. ET

Harley-Davidson stock

Harley-Davidson (HOG) is the most popular heavyweight motorcycle manufacturer in the world. The company maintains its own premium space in the crowded motorcycle market. In 2016, Harley-Davidson stock impressed investors by delivering over 28% positive returns.

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Analysts’ recommendations

According to the latest data compiled by Reuters, 23% of analysts covering Harley-Davidson gave “buy” recommendations, while 64% gave “hold” recommendations. Three analysts among the 22 covering the company’s stock gave “sell” recommendations.

On January 16, 2017, Harley-Davidson’s consensus 12-month target price was $57.00. It’s already higher than its market price of $58.73.

Key drivers for 2017

In recent quarters, the company’s total sales and revenues fell, but it continued to beat analysts’ estimates. It could be one of the reasons why its stock outperformed the broader market (SPY) in 2016.

Note that Harley-Davidson sells motorcycles to customers who have high disposable income. In general, an increase in the number of people with high disposable income could be positive for Harley-Davidson sales. Higher disposable income enhances consumers’ purchasing power. In the last few months, the US jobs market reported improvement and a positive trend in wages.

A continuation of the positive trend in US jobs could boost the company’s sales going forward and keep investors’ optimism alive in 2017.

Auto industry’s 4Q16 earnings

The auto industry’s 4Q16 earnings season is about to start. General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) will release their fiscal 2016 results in the next few weeks. Auto investors can stay updated on analysts’ earnings estimates by visiting Market Realist’s Autos page.


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