Last week, Harley-Davidson stock (HOG) traded on a mixed note, ending the week at $47.38 without any notable change. The company’s stock has fallen ~12.3% quarter-to-date 18.8% year-to-date. Let’s explore what could be affecting Harley-Davidson stock lately.
Is Harley’s dismal 2017 guidance driving pessimism?
In 2Q17, Harley’s adjusted EPS (earnings per share) were $1.48, about 4.5% lower than its EPS in 2Q16. The company’s profit margins have not seen any notable growth in the last few quarters due to its unfavorable product mix. For Harley, lightweight motorcycles tend to yield weaker profit margins than heavyweight motorcycles. Similarly, legacy automakers (FXD) Ford Motor (F), General Motors (GM), and Honda (HMC) see higher profits from heavyweight vehicles than small cars.
The company doesn’t expect its profit margins to improve in fiscal 2017. In 2Q17, Harley’s revenue fell ~5.2% year-over-year to $1.8 billion. It reported a 9.3% fall in its global retail sales in 2Q17, which could be the main reason for its lower revenue. The company’s US retail sales have stagnated for the last three quarters.
Key technical levels
In August, Harley’s stock performance was largely mixed, and it ended the month with a ~0.8% gain. On the upside, an immediate resistance lies near $48, followed by a key resistance near $49.90. Visit our Autos page for news and updates.