Market Overview

Wedbush: Harley-Davidson Lowered Guidance On Weakening International Demand


Harley-Davidson Inc (NYSE: HOG) reported disappointing second-quarter EPS and, more importantly, faced a significant decline in international demand, despite major investments in overseas dealers, according to Wedbush.

The Analyst

Wedbush’s James Hardiman maintained a Neutral rating on Harley-Davidson with a price target of $35.

The Thesis

Harley-Davidson posted GAAP EPS at $1.23. Although this came in modestly higher than the Street’s expectation of $1.20, it was 7 cents lower than Wedbush’s estimate of $1.30.

The company’s domestic retail sales declined by a worse-than-anticipated 8%. This was “particularly disappointing” since there had been signs of growth in March, Hardiman commented.

He added, however, that the “bigger disappointment” was in the international market, with sales down 9%. Sales in both Europe and Canada declined 14% in the quarter.

Harley-Davidson lowered its 2019 shipment guidance to a range of -5% to -7% versus its previous projection of -3% to -5%. The GAAP operating margin guidance was also reduced to 6%-7%, from 8%-9%.

The analyst reduced the 2019 non-GAAP estimate by 45 cents and the GAAP estimate by 38 cents, reflecting the effects of tariffs and restructuring costs.

Price Action

Shares of Harley-Davidson declined more than 3.8% to $35.07 at time of publishing on Wednesday morning.

Related Links:

Harley-Davidson Reports Mixed Q2 Earnings

Analyst Concerned About Harley's International Business

Latest Ratings for HOG

Nov 2019DowngradesSector WeightUnderweight
Oct 2019MaintainsNeutral
Jul 2019MaintainsOverweight

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Posted-In: James Hardiman WedbushAnalyst Color Reiteration Analyst Ratings


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