Motorcycles Surging Earnings Estimates Signal Upside for Harley-Davidson (HOG) Stock
Harley Cuts Breakout, Deluxe, and FXDR From 2021 Lineup
Rewire strategy affects other Softail, Sportster, and Street models too.There’s more trimming than just the aforementioned models, so let’s take a closer look.
Investors might want to bet on Harley-Davidson (HOG), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this motorcycle maker, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
Harley Posts Unexpected Loss Ahead of Turnaround Plan
Harley-Davidson Inc. posted an unexpected fourth-quarter loss ahead of a new turnaround plan to revive the troubled motorcycle manufacturer’s fortunes. © Bloomberg A customer wearing a protective mask looks at motorcycles on display at a Harley-Davidson dealership in Oakland, California, U.S., on Thursday, July 16, 2020. Harley-Davidson Inc. is scheduled to release earnings figures on July 28. The Milwaukee, Wisconsin-based company on Tuesday reported an adjusted loss per share of 44 cents, missing analysts’ consensus estimate for a 23 cent-profit and below the 20 cents it posted a year ago.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Harley-Davidson, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
For the current quarter, the company is expected to earn $0.97 per share, which is a change of +261.67% from the year-ago reported number.
Harley kickstarts 5-year turnaround plan after surprise quarterly loss
Harley kickstarts 5-year turnaround plan after surprise quarterly loss originally appeared on Autoblog on Tue, 2 Feb 2021 10:07:00 EST. Please see our terms for use of feeds.
Over the last 30 days, two estimates have moved higher for Harley-Davidson compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 6.77%.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $2.51 per share represents a change of +25000% from the year-ago number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Harley-Davidson. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 8.15%.
Favorable Zacks Rank
Thanks to promising estimate revisions, Harley-Davidson currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
While strong estimate revisions for Harley-Davidson have attracted decent investments and pushed the stock 36% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
Harley-Davidson Sales Finally Hit Paydirt Again .
It's the motorcycle maker's best first-quarter performance in years.The gains follow a change in when the bike maker introduces its new models, from late summer to early in the calendar year, to coincide with when bike riders are most interested in buying, and suggests the "Rewire" roadmap CEO Jochen Zeitz has laid out for turning the company around is gaining traction.