Harley-Davidson Firing on All Cylinders


Harley-Davidson Inc. (HOG) is buying and selling at a two-year excessive in Monday’s pre-market after beating Q1 2021 prime and backside line earnings estimates. The corporate posted a revenue of $1.68 per-share throughout the quarter, $0.78 higher than estimates, whereas income rose 29.4% year-over-year to $1.42 billion, beating consensus by greater than $150 million. HOG now expects bike section development between 30% and 35%, in comparison with earlier steering of 20% to 25%.

EU Escalates Commerce Conflict

The American icon additionally suggested it could “vigorously defend its place” after a European Union choice to topic your entire HOG product line to a 56% import tariff, beginning in June.  Continued commerce tensions following Donald Trump’s defeat in 2020 underpinned the ruling, which can sign the tip of all European operations. Even so, the corporate is firing on all cylinders to date in 2021, benefiting from a gross sales renaissance on account of the pandemic.

Robert W. Baird analyst Craig Kennison lately summed up rising bullishness, noting “We’re upgrading Harley-Davidson shares to Outperform for the primary time since 2016. We just like the strategic course led by a confirmed chief and anticipate traders to get behind the change narrative embedded within the 2021 to 2025 plan. We see the potential for retail to show constructive in 2021 for the primary time since 2014 — and observe that lean vendor stock ought to gas a wholesome replenishment cycle.”

Wall Road and Technical Outlook

Wall Road consensus has improved in lockstep with rising gross sales, now standing at an ‘Obese’ score based mostly upon 7 ‘Purchase’, 1 ‘Obese’, 8 ‘Maintain’, and 1 ‘Underweight’ advice. Value targets at the moment vary from a low of $33 to a Road-high $55 whereas the inventory is about to open Monday’s session greater than $4 above the median $39.50 goal. This placement shouldn’t act as a headwind as a result of upgrades are prone to comply with the bullish metrics.

The pre-market uptick marks the sixth try and mount resistance within the low 40s since a breakdown within the fourth quarter of 2018. A profitable advance will full a multiyear inverse head and shoulders breakout that would ultimately take a look at the 2017 excessive within the low 60s. Nonetheless, combined accumulation readings and shareholder anxiousness in response to the tariffs are prone to dampen shopping for curiosity into the third quarter.

For a have a look at all of at present’s financial occasions, try our financial calendar.

Disclosure: the creator held no positions in aforementioned securities on the time of publication.

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