Analysts favor a “hold”
According to the data compiled by Thomson Reuters on June 28, 15 out 21 analysts, or 71%, were recommending a “hold” on Harley-Davidson (HOG). These analysts could have a neutral view on HOG primarily due to stagnation in its home market sales and shrinking profitability.
“Buy” and “sell” recommendations
Five analysts, or about 24%, covering HOG’s stock favored a “buy,” while the remaining 5% recommended a “sell.”
In the last six months, a higher percentage of analysts now have a neutral stance. At the end of 2016, about 43% of total analysts covering Harley’s stock recommended a “buy.”
In the last few quarters, HOG has been trying to improve its manufacturing efficiencies to protect its margins. In a highly capital-intensive industry such as autos (XLY), companies like General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) strive to maximize their plant capacity in order to improve efficiencies.
According to several recent news reports, HOG is in talks with Volkswagen (VLKAY) to acquire Italian motorcycle brand Ducati. Any such acquisition could expand Harley’s customer base and strengthen its product portfolio.
Target price for HOG’s stock
According to analysts’ consensus, Harley-Davidson’s 12-month stock price target was $58.35. This target price was about 6.6% higher than its market price of $54.71 on June 28. HOG is scheduled to release its earnings results on July 18, 2017.
In the next part, we’ll analyze Toyota’s recent financials.