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On Tuesday, DA Davidson reaffirmed its positive stance on Harley-Davidson (NYSE:HOG) shares, maintaining a Buy rating and a $31.00 price target. Currently trading at $26.58, the motorcycle manufacturer’s stock has seen an uptick following its first-quarter earnings report, which surpassed expectations. According to InvestingPro data, the company maintains a P/E ratio of 9.6x and offers a dividend yield of 2.84%. However, the company also withdrew its financial guidance for fiscal year 2025, a move typically seen as a negative signal to the market.
Griffin Bryan from DA Davidson highlighted several factors that could be seen as beneficial for Harley-Davidson. The resolution of the proxy fight, the introduction of new entry-level motorcycle models, and the adjustment in the timing of model-year transitions are among the developments that the firm believes could support the stock’s performance. InvestingPro analysis reveals strong free cash flow yield and healthy liquidity, with current assets exceeding short-term obligations.
DA Davidson’s valuation approach for setting the price target involves a sum-of-the-parts (SOTP) analysis. This method assigns a 13.0 times price-to-earnings (P/E) multiple to the projected 2025 earnings of Harley-Davidson Motor Company (HDMC) and a 10.0 times P/E multiple to the projected earnings of Harley-Davidson Financial Services (HDFS) for the same year.
Despite the withdrawal of the FY25 guidance, DA Davidson sees the current situation as an attractive opportunity for investors to buy into the company. The firm’s continued endorsement of a Buy rating and a $31 price target suggests confidence in the intrinsic value and future prospects of Harley-Davidson, despite the recent removal of long-term financial projections.
In other recent news, Harley-Davidson has announced the election of all nine director nominees at its 2025 Annual Meeting of Shareholders and is continuing its search for a new CEO. The company has been navigating a contentious proxy fight with H Partners, which has been critical of the current board and leadership. Despite this, Institutional Shareholder Services Inc. (ISS) has endorsed all of Harley-Davidson’s director nominees, supporting the board’s strategic direction and governance. Meanwhile, Citi analysts have adjusted their outlook on Harley-Davidson, raising the stock’s price target to $24 from $23, while maintaining a Neutral rating. This revision follows the company’s first-quarter earnings report, which showed strong margin performance despite retail challenges in North America and Japan. Harley-Davidson’s management has withdrawn financial guidance due to uncertainties related to tariffs and consumer demand. The company remains focused on its Hardwire strategic plan, aiming to maintain its position in the motorcycle market and continue its innovation efforts. Additionally, Harley-Davidson is emphasizing its commitment to electric vehicle innovation through its controlling interest in LiveWire Group, Inc.
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