Tuesday, May 28, 2024
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Harley-Davidson attracts a bull rating from Morgan Stanley with a turnaround revving up

Morgan Stanley assumed coverage of Harley-Davidson (NYSE:HOG) again with an Overweight rating. The firm called Harley-Davidson (HOG) an iconic brand with leading market share in the U.S. motorcycle industry and a fiercely loyal customer base, despite a relatively small and aging addressable market.
Analyst Megan Alexander said the HOG turnaround under new leadership is showing signs of positive momentum as the motorcycle maker realizes benefits from its prior restructuring actions and drives innovation in its core product portfolio with a greater emphasis on profitability. Alexander and team believe the refocused strategy from HOG and strong capital allocation discipline will deliver upside to consensus earnings estimates.
“Moreover, valuation looks attractive at less than 9x FY24 P/E (on MSe) vs. the stock’s historical average of ~10.5x and a ~11% FCF yield. Despite some expected headwinds in ’24, we believe the business can return to growth in ’25 and view the current valuation inexpensive in light of our forecast for ~11% EPS growth in ’25 to ~$5,” updated Alexander.
The overall Morgan Stanley view on Harley-Davidson (HOG) is that the company is better post-COVID due to the notable restructuring in the business model and has a stronger balance sheet. Morgan Stanley assigned a price target of $50.00 to HOG.
Shares of Harley-Davidson (HOG) rose 0.55% in premarket trading to $39.20 vs. the 52-week range of $25.43 to $44.16.

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