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Why You Must Dump Harley-Davidson (HOG) from Your Portfolio
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On Jun 20, Zacks Investment Research downgraded Harley-Davidson Inc. (HOG - Free Report) to a Zacks Rank #4 (Sell).
The company reported earnings of $1.05 per share in the first quarter of 2017, lower than $1.36 per share, recorded a year-ago. Earnings per share for the quarter topped the Zacks Consensus Estimate of 99 cents.
Operating revenue declined to $1.33 billion from $1.58 billion, recorded in the year-ago quarter, but missed the Zacks Consensus Estimate of $1.35 billion.
For the second quarter of 2017, Harley-Davidson expects to ship 80,000 to 85,000 motorcycles, compared with 88,160 motorcycles, shipped in the year-ago period.
The company reiterated its expectation of motorcycle shipments in 2017 to be either the same or slightly lower than 2016. This weak guidance is due to softness in the U.S. market, high competition and global economic uncertainty.
The company also continues to project operating and gross margins to be similar to the 2016 levels and expects capital expenditures to the tune of of $200–$220 million, this year.
Harley-Davidson’s worldwide dealer retail sales of new motorcycles went down 4.3% to 55,049 units in first-quarter 2017, mainly due to a weak demand in the U.S. Retail motorcycle sales were also adversely affected by higher competitive pressures. Total shipments thus deteriorated 14.7% year over year to 70,831 motorcycles in first-quarter 2017.
The company continues to be wary of confronting a severe competition which will hurt retail sales this year as competitors rely on discounts and product introductions to boost sales. However, it seriously focuses on expanding its product portfolio as well as improving the international reach, assumed to increase its customer base and the sales graph in turn.
Another segment of the company i.e. the Financial Services is also believed to observe a decline in operating income in 2017, as higher borrowing costs and credit losses in the year are partially offset by higher lending rates.
Harley-Davidson’s shares have underperformed the Zacks categorized Automotive-Domestic industry in the last three months. The company’s shares slumped 8.4% compared with the industry’s recorded gain of 9.2% during the period.
Allison Transmission has expected long-term growth rate of 11%.
Ferrari has expected long-term growth rate of 14.1%.
Dana has expected long-term growth rate of 3%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Why You Must Dump Harley-Davidson (HOG) from Your Portfolio
On Jun 20, Zacks Investment Research downgraded Harley-Davidson Inc. (HOG - Free Report) to a Zacks Rank #4 (Sell).
The company reported earnings of $1.05 per share in the first quarter of 2017, lower than $1.36 per share, recorded a year-ago. Earnings per share for the quarter topped the Zacks Consensus Estimate of 99 cents.
Operating revenue declined to $1.33 billion from $1.58 billion, recorded in the year-ago quarter, but missed the Zacks Consensus Estimate of $1.35 billion.
For the second quarter of 2017, Harley-Davidson expects to ship 80,000 to 85,000 motorcycles, compared with 88,160 motorcycles, shipped in the year-ago period.
The company reiterated its expectation of motorcycle shipments in 2017 to be either the same or slightly lower than 2016. This weak guidance is due to softness in the U.S. market, high competition and global economic uncertainty.
The company also continues to project operating and gross margins to be similar to the 2016 levels and expects capital expenditures to the tune of of $200–$220 million, this year.
Harley-Davidson’s worldwide dealer retail sales of new motorcycles went down 4.3% to 55,049 units in first-quarter 2017, mainly due to a weak demand in the U.S. Retail motorcycle sales were also adversely affected by higher competitive pressures. Total shipments thus deteriorated 14.7% year over year to 70,831 motorcycles in first-quarter 2017.
The company continues to be wary of confronting a severe competition which will hurt retail sales this year as competitors rely on discounts and product introductions to boost sales. However, it seriously focuses on expanding its product portfolio as well as improving the international reach, assumed to increase its customer base and the sales graph in turn.
Another segment of the company i.e. the Financial Services is also believed to observe a decline in operating income in 2017, as higher borrowing costs and credit losses in the year are partially offset by higher lending rates.
Harley-Davidson’s shares have underperformed the Zacks categorized Automotive-Domestic industry in the last three months. The company’s shares slumped 8.4% compared with the industry’s recorded gain of 9.2% during the period.
Harley-Davidson, Inc. Price and Consensus
Harley-Davidson, Inc. Price and Consensus | Harley-Davidson, Inc. Quote
Stocks to Consider
Better-ranked companies in the auto space are Allison Transmission Holdings Inc. (ALSN - Free Report) , Ferrari N.V. (RACE - Free Report) and Dana Incorporated (DAN - Free Report) . Allison Transmission and Ferrari sport a Zacks Rank #1 (Strong Buy), while Dana carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Allison Transmission has expected long-term growth rate of 11%.
Ferrari has expected long-term growth rate of 14.1%.
Dana has expected long-term growth rate of 3%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>