In 2017, Harley-Davidson (HOG) maintained the highest US market share in the heavyweight motorcycle sector. However, the company’s stock underperformed other auto stocks last year and lost ~12.8%.
In 2018 so far, HOG has lost ~15.3% through August 28, making it the lowest performer in the auto industry. In comparison, auto stocks (FXD) Honda (HMC), Ford (F), and General Motors (GM) have fallen 10.6%, 19.0%, and 9.0%, respectively, year-to-date.
Analysts on HOG stock
According to the latest data compiled by Reuters, 68.0% of analysts covering Harley-Davidson stock gave it “hold” ratings. Only 26.0% of these analysts recommended a “buy.” The remaining 6.0% of analysts maintained a bearish view on the company and gave it “sell” ratings.
On August 28, the analysts’ consensus target price for Harley-Davidson stock was $47.58 for the next 12 months. This target price has risen slightly in the last month from ~$46.83. The current price target reflected 10.4% upside potential from its market price of $43.12.
The company’s ongoing struggle to revive its motorcycle sales could be a factor in analysts’ consensus price target for HOG stock trading on a negative note in 2018 so far.
Weakness in earnings and sales
On June 25, Harley-Davidson (HOG) announced that it would shift part of its motorcycle production for the European market from the United States to its international production facilities. The company’s move was later criticized by President Trump in a series of tweets on June 26.
Motorcycle pioneer Harley-Davidson released its second-quarter earnings on July 24. In the second quarter, Harley reported a 2.0% YoY (year-over-year) decline in its adjusted earnings but managed to beat analysts’ estimates. The company’s second-quarter global motorcycle shipments fell ~11.3% YoY, which resulted in a 2.9% decline in its revenues.
Read on to the next part where we’ll compare mainstream automakers’ valuation multiples in August.