Harley-Davidson’s Q1 Results To Disappoint?

HOG: Harley-Davidson logo

Harley-Davidson (NYSE: HOG) is scheduled to report its fiscal Q1 2021 results on Tuesday, April 20. We expect HOG to miss the consensus estimates for revenues and earnings. The company missed consensus estimates of earnings for three of the last four quarters and missed revenue estimates in two of the last four quarters. In the last few years the company has seen a continuous fall in sales volume which increased in 2020 due to the pandemic. In 2021 we expect the company to grow in volume after a 30% fall in sales volume in the previous year. 

Our forecast indicates that Harley-Davidson’s valuation is around $41 per share, which is in line with the current market price of around $41. Look at our interactive dashboard analysis on Harley-Davidson’s pre-earnings: What To Expect in Q1? for more details. 

(1) Revenues expected to be below consensus estimates in Q1

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Trefis estimates HOG’s fiscal Q1 2021 revenues to be around $1.17 billion, 6% below the $1.24 billion consensus estimate. HOG’s revenues of $4.1 billion for the full year 2020 were well below its 2019 figure, as the automobile sector was one of the worst hit in the pandemic. The company also exited its India business through its new “The Rewire” strategy as it decided to focus on the 50 most profitable markets. Overall, in FY 2021 we expect revenue of around $5 billion. Our dashboard on Harley-Davidson‘s revenues offers more details on the company’s segments.

(2) EPS likely to be below the consensus estimates

HOG’s Q1 2021 earnings per share (EPS) is expected to be $0.40 per Trefis analysis, lower than the consensus estimate of $0.87. The company’s net income margin fell sharply in 2020 due to the pandemic. This decreased the EPS figure from $2.68 to $0.01. The removal of lockdowns and steady growth in the rate of vaccination has contributed to a revival in demand across sectors. Altogether, the company is likely to report an EPS of around $1.27 in FY2021.

(3) Stock price estimate in line with the current market price

Going by our Harley-Davidson’s valuation, with an EPS estimate of around $1.27 and a P/E multiple of just above 32x in fiscal 2021, translates into a price of $41, which is in line with the current market price of around $41.

Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year

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