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On Thursday, Citi analysts adjusted their outlook on Harley-Davidson stock (NYSE:HOG), decreasing the price target to $29 from the previous $31, while maintaining a neutral rating on the company’s shares. Currently trading at $26.40, near its 52-week low of $25.25, the stock carries a modest P/E ratio of 7.8x. The adjustment came in response to the motorcycle manufacturer’s fourth-quarter margins, which fell short of expectations despite retail sales being generally in line with projections. InvestingPro analysis indicates the stock is currently fairly valued, with additional insights available in the comprehensive Pro Research Report.
Harley-Davidson’s inventory reductions were noted to be slightly better than anticipated, but the company’s guidance for 2025, which is below market expectations, assumes unchanged retail sales. According to InvestingPro data, analysts forecast a significant 22% revenue decline for the current year. Citi analysts expressed skepticism about this projection, highlighting the challenges of maintaining current demand momentum and the tough comparisons due to past innovations.
The management’s forecast for a significant retail sales increase in the latter half of the year was met with doubt by Citi analysts, leading them to believe that the company’s full-year guidance may be overly optimistic. Consequently, their estimates are considerably below Harley-Davidson’s outlook.
The new price target of $29 is based on a 10x multiple of Citi’s 2026 earnings estimate for Harley-Davidson. This revision reflects the analysts’ cautious stance on the company’s future performance in light of the recent financial results and forward-looking statements provided by Harley-Davidson’s management.
In other recent news, Harley-Davidson, Inc. reported a larger loss than anticipated for the fourth quarter of 2024. The company posted a loss of $0.93 per share, falling short of analyst estimates of a $0.66 per share loss. Revenue also missed the mark, declining 35% to $688 million, compared to the consensus estimate of $712 million. These results reflect the ongoing challenges Harley-Davidson faces in the discretionary products market, with its motorcycle segment experiencing a significant 47% drop in revenue.
Despite these challenges, the company did note some positive developments. The launch of new Street Glide and Road Glide touring motorcycles led to nearly 5% growth in the U.S. Touring segment, boosting Harley-Davidson’s market share to 74.5% in 2024. For the full year of 2024, the company reported diluted earnings per share of $3.44 and an operating margin of 6.7%.
Looking forward to 2025, Harley-Davidson anticipates its earnings per share and revenue to be flat to down 5%. This projection comes from the company’s expectation of an operating income margin between 7.0% and 8.0%. These are recent developments in the company’s financial performance and projections.
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