On Wednesday, BMO Capital Markets adjusted its outlook on Harley-Davidson (NYSE:HOG) shares, raising the price target to $50 from the previous $45 while maintaining an Outperform rating on the stock. The revision reflects positive developments in retail demand and confidence from dealers about continued sales momentum.
The firm's analysis indicates that Harley-Davidson's retail demand in March showed strength, albeit with some variability due to weather conditions in different markets. The release of the new Model Year 24 motorcycles (MY24s) has buoyed dealer optimism for sustained sales growth during the upcoming peak months.
According to the firm's estimates, Harley-Davidson's U.S. retail sales for March experienced a year-over-year increase in the high single-digit to low double-digit percentage range. This performance stands in contrast to a 23% year-over-year decrease reported by Polk for the same period.
Based on these findings, BMO Capital Markets has revised its first-quarter retail sales estimate for Harley-Davidson in the U.S. to a growth of 8.5%, an increase from the previously projected 7.5%. The firm attributes this adjustment to the better-than-expected demand and the company's successful shipping of new products to dealers.
The updated price target and sales estimates suggest a positive outlook for Harley-Davidson as it enters the key selling season, backed by strong market demand and the introduction of its latest motorcycle models.
InvestingPro Insights
Complementing the positive outlook from BMO Capital Markets, InvestingPro data underscores some of the financial strengths that Harley-Davidson (HOG) has demonstrated. The company's market capitalization stands at a robust $5.88 billion, with a favorable price-to-earnings (P/E) ratio of 8.62, indicating that the stock may be undervalued relative to earnings. Additionally, Harley-Davidson's revenue growth over the last twelve months as of Q4 2023 was 1.41%, showcasing a stable financial performance.
InvestingPro Tips reveal that Harley-Davidson's management has been actively buying back shares, which can be a sign of confidence in the company's future prospects. Furthermore, the company has raised its dividend for three consecutive years and maintained dividend payments for an impressive 32 years. These actions reflect a commitment to returning value to shareholders and could be attractive to income-focused investors.
For readers interested in a deeper dive into Harley-Davidson's financial health and future prospects, there are additional InvestingPro Tips available. With the use of coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking valuable insights that could inform investment decisions. The platform lists 13 more tips that could provide a comprehensive view of the company's performance and potential.
As Harley-Davidson approaches its next earnings date on April 24, 2024, investors will be keen to see if the company's financials align with the current optimism in the market and whether the strategies in place will sustain the positive momentum captured in the recent price uptick over the last six months.
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