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1. Company Snapshot

1.a. Company Description

Harley-Davidson, Inc.manufactures and sells motorcycles.The company operates in two segments, Motorcycles and Related Products and Financial Services.


The Motorcycles and Related Products segment designs, manufactures, and sells Harley-Davidson motorcycles, including cruiser, touring, standard, sportbike, and dual models, as well as motorcycle parts, accessories, apparel, and related services.This segment sells its products to retail customers through a network of independent dealers, as well as e-commerce channels in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia-Pacific.The Financial Services segment provides wholesale financing services, such as floorplan and open account financing of motorcycles, and parts and accessories; and retail financing services, including installment lending for the purchase of new and used Harley-Davidson motorcycles, as well as point-of-sale protection products comprising motorcycle insurance, extended service contracts, and motorcycle maintenance protection.


This segment also licenses third-party financial institutions that issue credit cards bearing the Harley-Davidson brand.Harley-Davidson, Inc.was founded in 1903 and is based in Milwaukee, Wisconsin.

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1.b. Last Insights on HOG

Negative drivers behind Harley-Davidson's recent performance include a consensus rating of "Hold" by analysts, with one sell recommendation and six hold recommendations. The company's leadership has undergone changes, with Jonathan Root taking on a new role as Chief Financial and Commercial Officer, and Bryan Niketh rejoining as Chief Operating Officer. Additionally, Harley-Davidson Financial Services, Inc. has announced the redemption of its outstanding 6.50% Medium-Term Notes due 2028, which may impact the company's financial obligations.

1.c. Company Highlights

2. Harley-Davidson's Q4 2025 Earnings: A Challenging Year

Harley-Davidson's Q4 2025 financial performance was marked by a significant decline in revenue, with consolidated revenue down 28% to an undisclosed figure, and a substantial operating loss of $361 million. Earnings per share (EPS) also took a hit, with a loss of $2.44, compared to analyst estimates of -$0.92. For the full year 2025, consolidated revenue was $4.5 billion, 14% lower than the previous year, while EPS was $2.78, down from $3.44 in 2024.

Publication Date: Feb -15

📋 Highlights
  • Q4 Revenue Decline: Consolidated revenue in Q4 2025 dropped 28% to $1.3 billion.
  • Operating Loss Expansion: Q4 operating income turned into a $361 million loss, worsening from a $193 million loss in 2024.
  • Cost-Cutting Initiatives: Company targets $150 million annual run-rate savings by 2027 through cost reviews and operational efficiency.
  • Dealer Inventory Reduction: Dealer inventory fell 17% YoY in Q4, with a focus on clearing touring model overhang via promotions.
  • HDFS Transaction Impact: $1 billion dividend from HDFS to HDI in Q4, following a $6 billion loan receivables sale and debt retirement.

Segment Performance

The decline in revenue was driven by decreases in both HDMC and HDFS revenue. HDMC revenue decreased by 10% to $379 million in Q4, driven by net pricing and incentive spend, while HDFS revenue also declined. For the full year 2025, HDMC revenue decreased by 13% to $3.6 billion, with the biggest driver being decreased wholesale volumes. However, HDFS operating income was a record high of $490 million, primarily driven by favorable provision for credit loss expense.

Operational Highlights

Despite the challenging financial performance, Harley-Davidson is taking steps to address its issues, including improving dealer profitability, reigniting brand momentum, and reducing costs. The company is also focusing on creating motorcycles that invite customization and broadening its portfolio to make its products more accessible to a wider range of customers. As CEO Arthur Starrs noted, "We're pleased with the progress on selling through touring inventory. We'll continue to focus on healthy inventory levels and support dealers."

Outlook and Valuation

Looking ahead to 2026, Harley-Davidson expects retail units of 130,000 to 135,000 and wholesale units of 130,000 to 135,000. Analysts estimate revenue growth of 2.9% next year. With a current P/E Ratio of 6.89, P/B Ratio of 0.85, and EV/EBITDA of 3.36, the market appears to be pricing in a challenging near-term outlook for the company. However, with a Dividend Yield of 3.53% and a Free Cash Flow Yield of 16.73%, there may be value opportunities for income-focused investors.

Challenges Ahead

Harley-Davidson faces several challenges, including a volatile global tariff environment, which is expected to pressure operating leverage in 2026. The company's CFO, Jonathan Root, noted that "we need multiple years to rebuild the balance sheet to drive income statement growth." With a Net Debt / EBITDA ratio of -0.18, the company's debt position is currently favorable, but the road to recovery will likely be long and challenging.

3. NewsRoom

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Harley-Davidson, Inc. Declares Dividend

Feb -13

Source: prnewswire.com

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How to Approach Harley-Davidson Stock After Q4 Earnings Release?

Feb -13

Source: zacks.com

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Harley-Davidson Q4: Weak Earnings Amid Strategy Reset

Feb -12

Source: seekingalpha.com

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Donald Smith & Co's Strategic Moves: Equinox Gold Corp Sees a -2.9% Impact

Feb -12

Source: gurufocus.com

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This iconic American brand's debt may be on the verge of junk status

Feb -11

Source: marketwatch.com

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Harley-Davidson Shares Rebound After 11% Premarket Drop on 2026 Outlook

Feb -10

Source: gurufocus.com

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Harley-Davidson, Inc. (HOG) Q4 2025 Earnings Call Transcript

Feb -10

Source: seekingalpha.com

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Can Harley-Davidson Ever Roar Higher Again?

Feb -10

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.14%)

6. Segments

Harley-Davidson Motor Company

Expected Growth: 4.65%

Harley-Davidson's 4.65% growth is driven by increasing demand for premium motorcycles, expansion into international markets, and a focus on electric and adventure touring bikes. Additionally, the company's efforts to improve dealership experiences, enhance digital engagement, and introduce new products, such as the LiveWire electric motorcycle, contribute to its growth momentum.

Harley-Davidson Financial Services

Expected Growth: 7.4%

Harley-Davidson Financial Services' 7.4% growth is driven by increasing motorcycle sales, expansion of financing options, and a growing used-bike market. Additionally, the company's focus on digital transformation, improved customer experience, and strategic partnerships contribute to its growth momentum.

LiveWire

Expected Growth: 10.9%

LiveWire's 10.9% growth is driven by increasing demand for electric motorcycles, government incentives for eco-friendly vehicles, and Harley-Davidson's strategic expansion into new markets. Additionally, the brand's focus on innovation, quality, and performance has helped to attract a younger demographic and increase brand loyalty.

7. Detailed Products

Motorcycles

Harley-Davidson offers a wide range of motorcycles, including cruisers, touring bikes, and electric motorcycles.

Parts and Accessories

Harley-Davidson offers a vast array of parts and accessories, including saddlebags, windshields, and performance upgrades.

Apparel and Merchandise

Harley-Davidson offers a wide range of apparel and merchandise, including jackets, helmets, and souvenirs.

Financial Services

Harley-Davidson Financial Services provides financing options for motorcycle purchases and insurance products.

Experiences

Harley-Davidson offers a range of experiences, including riding courses, motorcycle rentals, and guided tours.

8. Harley-Davidson, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Harley-Davidson's products are highly differentiated, and there are limited substitutes for their motorcycles. However, the rise of electric motorcycles and scooters could pose a threat in the future.

Bargaining Power Of Customers

Harley-Davidson's customers have some bargaining power due to the availability of alternative brands and models. However, the company's strong brand loyalty and customer retention programs help to mitigate this power.

Bargaining Power Of Suppliers

Harley-Davidson has a diverse supplier base, and no single supplier has significant bargaining power. The company's large scale of operations also gives it negotiating power with suppliers.

Threat Of New Entrants

The motorcycle industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized manufacturing expertise. This limits the threat of new entrants.

Intensity Of Rivalry

The motorcycle industry is highly competitive, with several established players competing for market share. Harley-Davidson faces intense competition from Japanese manufacturers such as Honda, Yamaha, and Kawasaki, as well as from Indian Motorcycle and Polaris Industries.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 68.71%
Debt Cost 3.95%
Equity Weight 31.29%
Equity Cost 11.48%
WACC 6.30%
Leverage 219.63%

11. Quality Control: Harley-Davidson, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
LCI

A-Score: 5.9/10

Value: 6.3

Growth: 5.8

Quality: 5.0

Yield: 8.0

Momentum: 4.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Thor Industries

A-Score: 5.0/10

Value: 6.6

Growth: 4.0

Quality: 5.5

Yield: 4.0

Momentum: 4.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Harley-Davidson

A-Score: 4.8/10

Value: 8.1

Growth: 4.0

Quality: 4.4

Yield: 5.0

Momentum: 2.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Polaris

A-Score: 4.5/10

Value: 6.5

Growth: 2.6

Quality: 2.6

Yield: 7.0

Momentum: 5.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Brunswick

A-Score: 4.2/10

Value: 5.8

Growth: 4.8

Quality: 1.9

Yield: 4.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Steven Madden

A-Score: 4.0/10

Value: 2.7

Growth: 5.2

Quality: 4.4

Yield: 4.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.22$

Current Price

19.23$

Potential

-0.00%

Expected Cash-Flows