Harley-Davidson To Deliver Mixed Results?

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Harley-Davidson (NYSE: HOG) is scheduled to report its fiscal Q2 2021 results on Wednesday, July 21. We expect HOG to give mixed results, beating the consensus estimates for revenues but missing the earnings. The company missed consensus estimates of earnings for two of the last four quarters and missed revenue estimates in three 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 the company saw growth of 9% in sales volume led by the North America region. We expect North America sales to continue growing while EMEA and Latin America will start recovering. 

Our forecast indicates that Harley-Davidson’s valuation is $48 per share, which is 8% higher than the current price of $44. Look at our interactive dashboard analysis on Harley-Davidson’s pre-earnings: What To Expect in Q2? for more details. 

(1) Revenues expected to be above consensus estimates in Q2

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Trefis estimates HOG’s fiscal Q2 2021 revenues to be around $1.51 billion, 6% above the $1.42 billion consensus estimate. Recently, the company 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 $5.3 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 Q2 2021 earnings per share (EPS) is expected to be $0.65 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. 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 $1.40 in FY2021.

(3) Stock price estimate 8% above current market price

Going by our Harley-Davidson’s valuation, with an EPS estimate of around $1.40 and a P/E multiple of 34.3x in fiscal 2021, translates into a price of $48, which is 8% above the current market price of around $44.

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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