Harley Given Buy Rating Ahead of 4Q Results

January 9, 2013
Bryan Harley
Bryan Harley
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Our resident road warrior has earned his stripes covering the rally circuit, from riding the Black Hills of Sturgis to cruising Main Street in Daytona Beach. Whether it's chopped, bobbed, or bored, metric to 'Merican, he rides 'em all.

Harley Davidson Motorcycles

Harley-Davidson (HOG) is receiving “Buy” ratings ahead of its full-year 2012 financial results, scheduled to be released January 29. Until then, 2013 begins with a promising outlook provided by an American Banking & Market News report stating Harley has received a “Buy” rating by Citigroup with a $58 target price on stock. 

Harley-Davidson started the 2012 financial year with a bang, posting its best first quarter results in years. Income from continuing operations was up considerably (74 cents a share compared to 51 cents a share the year before), it beat its shipping expectations for the quarter and bumped up its yearly projections by 5000 motorcycles.

The Motor Company’s second quarter results reinforced the first quarter findings as earnings rose 29.7% to $247.3 million, $1.07 per diluted share, up from the year prior’s 81 cents per share. But even though sales were up, forecasts for the end of the year were lukewarm because of projected drops in production as changes were made to its York and Kansas City factories.

This cautious outlook was confirmed when the third quarter 2012 results were released. Net income dropped 27% in comparison to 2011 numbers as shipments slowed due to the implementation of the new system at York. Earnings of $134 million, 59 cents per share, were down considerably from the $183.6 million or 78 cents per share from the third quarter 2011. The 59 cents per share still beat estimates by one percent and consolidated revenue numbers of $1.25 billion also eclipsed estimates.

As for the fourth quarter, expect Harley to meet its shipping expectations of 245,000 to 250,000 motorcycles worldwide. Sales should be bolstered by the release of its 2013 models but the changes at its assembly plants will still cut into production and add to its overhead expenses. Harley has said it will be bumping up production in the first quarters of 2013 as prime selling season rolls around.
Several other analysts also gave Harley favorable projections in the American Banking & Market News report, with both Wedbush and RBC Captital giving it an “Outperform” rating. Harley shares are currently trading for $50.64 per share on the New York Stock Exchange. Over the last year HOG stocks have hit a low of $37.84 per share and have climbed as high as $54.32 per share.