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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

Harley-Davidson's recent performance was negatively impacted by concerns over the motorcycle industry's secular trends and pricing power. Morgan Stanley's Stephen Grambling downgraded the stock to Sell, citing these factors. However, the company's Q3 earnings and revenues surpassed expectations, driven by higher motorcycle shipments and stronger segment performance. The company's financial services subsidiary, HDFS, also announced tender offers for its outstanding medium-term notes. Additionally, the company declared a dividend of $0.18 per share for Q4 2025. Institutional investors, such as American Century Companies Inc., have increased their holdings in the company.

1.c. Company Highlights

2. Harley-Davidson Delivers Strong Q3 Earnings, Outperforming Estimates

Harley-Davidson's Q3 financial performance was marked by a 23% increase in HDMC revenue, driven by a 33% rise in motorcycle shipments to 36,500 units. However, gross margin contracted to 26.4% from 30.1% in the prior year, due to unfavorable operating leverage. Earnings per share (EPS) came in at $3.1, significantly above the estimated $1.38. The company's revenue growth was largely driven by increased wholesale volume at HDMC.

Publication Date: Nov -05

📋 Highlights
  • HDFS Transaction: Generated $1.2B-$1.25B cash by Q1 2026 via $6B loan sales and equity stake divestiture
  • Q3 Global Retail Decline: Down 6% YoY (North America -5%, International -9%) despite marketing strategy adjustments
  • HDMC Revenue Growth: Rose 23% YoY driven by 33% motorcycle shipment increase to 36,500 units in Q3
  • Gross Margin Pressure: Q3 margin at 26.4% vs 30.1% prior year, YTD margin at 28.0% vs 31.3% due to tariffs and operating leverage
  • Capital Returns: $100M in Q3 share buybacks ($3.4M shares), $1.7B total returned to shareholders since 2022

Segment Performance

The North American market experienced a 5% decline in retail sales, while international markets were down 9%. However, the company adjusted its consumer marketing and go-to-market strategies, which had a positive impact in Q3. The HDFS segment reported a 3% decrease in revenue to $261 million, but operating income increased by $362 million, driven by the impact of the HDFS transaction.

Strategic Developments

Harley-Davidson has executed a strategic partnership with KKR and PIMCO to transform HDFS into a capital-light derisked business model, expected to unlock $1.2 billion to $1.25 billion in discretionary cash through Q1 2026. The new CEO, Arthur Starrs, emphasized the company's focus on celebrating the joy of ridership, bringing more riders into the community, and making the brand more appealing to younger riders with the upcoming Sprint bike in 2026.

Valuation and Growth Prospects

With a P/E Ratio of 6.1 and an expected revenue growth rate of 4.2% next year, the current valuation appears reasonable. The company's commitment to returning capital to shareholders is evident, having bought back 3.4 million shares at a value of $100 million in Q3 2025. The dividend yield of 2.81% and a free cash flow yield of 12.71% also make the stock attractive. As the company navigates the evolving commercial environment, its efforts to reduce global dealer inventory and improve cost and capital efficiency are expected to drive growth.

Outlook

Harley-Davidson's guidance for 2026 is expected to be announced in the coming weeks, with a focus on retail sales and a likely decrease in shipments to clear more inventory at dealers. The company's normalized operating income for HDFS is expected to be around $120 million to $130 million going forward, with the HDFS transaction expected to close over multiple quarters.

3. NewsRoom

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Hyster-Yale (NYSE:HY) Shares Acquired Rep. Tim Moore

Dec -04

Source: defenseworld.net

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Rep. Tim Moore Purchases Shares of Genprex (NASDAQ:GNPX)

Dec -04

Source: defenseworld.net

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Rep. Tim Moore Sells Off Shares of Harley-Davidson, Inc. (NYSE:HOG)

Dec -04

Source: defenseworld.net

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Harley-Davidson (NYSE:HOG) Shares Acquired Rep. Tim Moore

Dec -04

Source: defenseworld.net

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LGI Homes (NASDAQ:LGIH) Shares Unloaded Rep. Tim Moore

Dec -04

Source: defenseworld.net

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Rep. Tim Moore Sells Off Shares of Verizon Communications Inc. (NYSE:VZ)

Dec -04

Source: defenseworld.net

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Rep. Tim Moore Sells Off Shares of Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)

Dec -04

Source: defenseworld.net

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Rep. Tim Moore Purchases Shares of Hyster-Yale, Inc. (NYSE:HY)

Dec -04

Source: defenseworld.net

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: 5.6/10

Value: 6.9

Growth: 5.8

Quality: 5.1

Yield: 8.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Thor Industries

A-Score: 4.8/10

Value: 6.1

Growth: 4.0

Quality: 5.3

Yield: 4.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Brunswick

A-Score: 4.5/10

Value: 6.9

Growth: 4.8

Quality: 2.7

Yield: 5.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Harley-Davidson

A-Score: 4.4/10

Value: 6.6

Growth: 4.0

Quality: 3.4

Yield: 5.0

Momentum: 2.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Steven Madden

A-Score: 4.3/10

Value: 3.9

Growth: 5.2

Quality: 5.4

Yield: 5.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Polaris

A-Score: 3.9/10

Value: 6.4

Growth: 2.6

Quality: 2.4

Yield: 7.0

Momentum: 2.0

Volatility: 3.3

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

23.36$

Current Price

23.36$

Potential

-0.00%

Expected Cash-Flows