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On Wednesday, Citi analysts adjusted their outlook on Harley-Davidson stock (NYSE:HOG), reducing the price target to $28 from the previous $29 while maintaining a Neutral rating. The revision comes amid concerns about the company’s guidance and retail environment challenges, especially following a challenging first quarter. The stock, currently trading at $25.06, has declined over 30% in the past six months and trades at a modest P/E ratio of 7.2x. According to InvestingPro analysis, the stock appears fairly valued based on its comprehensive Fair Value model.
The analysts expressed skepticism about Harley-Davidson’s forward-looking statements, particularly regarding the retail market’s performance, which was already hard to justify three months ago and has become even more doubtful after a rough start to the year. They noted that even if the disappointing results for the first quarter are in line with their expectations, it remains uncertain whether the company’s management will decide to significantly revise their guidance. With the next earnings report due on April 24, investors seeking deeper insights can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research reports.
The initial guidance had been issued with a confident outlook for the year, despite the anticipated difficult comparisons and headwinds faced in the first quarter. However, the analysts pointed out that there is little to support the optimistic projections implied by the company’s guidance for a significant rebound in its financial performance.
Citi’s analysts have once again lowered their estimates for Harley-Davidson based on the tough quarter and the lack of evidence to support a strong recovery in the latter part of the year. The reduction in the price target reflects these concerns and adjustments to their financial forecasts for the iconic motorcycle manufacturer.
In other recent news, Harley-Davidson reported a substantial loss for the fourth quarter of 2024, with earnings of $0.93 per share falling short of analyst expectations of a $0.66 loss. The company’s revenue decreased by 35% to $688 million, missing the consensus estimate of $712 million. Harley-Davidson’s motorcycle segment experienced a 47% revenue drop, with global shipments down 53%. Despite these setbacks, the launch of new touring motorcycles led to a 5% growth in the U.S. Touring segment, boosting market share to 74.5% in 2024. Looking forward, the company expects its 2025 revenue and earnings per share to remain flat or decrease by up to 5%.
In related developments, Harley-Davidson declared a $0.18 per share dividend for the first quarter of 2025, indicating a stable financial position despite market challenges. Analyst firm DA Davidson maintained a Buy rating with a $31 target, citing the company’s strategic plans to reduce dealer inventories as a positive step. Conversely, Citi analysts lowered their target to $29, maintaining a neutral stance due to skepticism about the company’s optimistic retail sales forecast for 2025. These recent developments highlight the mixed sentiment among analysts regarding Harley-Davidson’s financial health and future prospects.
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