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The Zacks Analyst Blog Highlights: Harley Davidson
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For Immediate Release
Chicago, IL –August 14, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Harley Davidson (HOG - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Harley Davidson Gets Hit Hard by New Trump Tweet
Shares in U.S. motorcycle manufacturer Harley Davidson traded lower by more than 4% on Monday after president Trump tweeted over the weekend that he supports customers who plan to boycott the company over their plans to shift some production overseas to avoid retaliatory tariffs in the European Union on their products.
Announced in June, the EU’s tariffs raised the import tax on a wide range of American products from 6% to 31%. A big percentage of the products affected are agricultural goods and various types of steel and aluminum, but he EU appears to have targeted Harley Davidson as a uniquely American brand that’s especially popular in areas of the U.S. that supported President Trump in the 2016 election.
Harley Davidson already operates factories in India and Thailand and plans to shift production of motorcycles for the European markets to those facilities to avoid the tariffs which apply only to imports from the U.S. The company states that they intend to continue manufacturing bikes for the U.S. markets at their four existing plants in Wisconsin, Missouri and Pennsylvania.
Even before the tariff situation, Harley Davidson had already been undergoing a significant transformation as worldwide consumer demand for its large, V-Twin motorcycles ebbs. The company has plans to produce smaller, lighter motorcycles with engines between 250 and 500ccs of displacement, primarily for the Indian market and also has a modern electric motorcycle in the works that’s expected to debut in 2019.
In their most quarterly recent earnings release, Harley reported net earnings of $1.45/share on revenues of $1.71B, both of which beat the Zacks consensus estimates by about 7%, though those expectations had already been lowered and were a decline of 2% and 3% respectively when compared to 2017 results.
Gross margins, operating margins and income from financing activities were all lower than 2017.
Worldwide motorcycle retail sales at Harley Davidson were off 5.1%, with U.S. sales falling 8.7% and international sales growing 0.5%.
Harley Davidson is currently a Zacks rank #3 (Hold), but it’s not difficult to imagine downward revisions in the coming months as the trade wars grinds on.
Harley Davidson has stressed that the shift in manufacturing sites is not an attempt to reduce costs, but is intended only to avoid the crippling effect of the E.U tariffs, but that hasn’t saved them from the ire of president Trump who would like to see manufacturing grow in the U.S. rather than leave for foreign shores and who believes that their move undermines his hardline trade policies.
It’s a tough spot for them to be in. The likely financial effects of any boycotts are difficult to quantify, but the bad press can only be seen as a negative for sales in the U.S.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Harley Davidson
For Immediate Release
Chicago, IL –August 14, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Harley Davidson (HOG - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Harley Davidson Gets Hit Hard by New Trump Tweet
Shares in U.S. motorcycle manufacturer Harley Davidson traded lower by more than 4% on Monday after president Trump tweeted over the weekend that he supports customers who plan to boycott the company over their plans to shift some production overseas to avoid retaliatory tariffs in the European Union on their products.
Announced in June, the EU’s tariffs raised the import tax on a wide range of American products from 6% to 31%. A big percentage of the products affected are agricultural goods and various types of steel and aluminum, but he EU appears to have targeted Harley Davidson as a uniquely American brand that’s especially popular in areas of the U.S. that supported President Trump in the 2016 election.
Harley Davidson already operates factories in India and Thailand and plans to shift production of motorcycles for the European markets to those facilities to avoid the tariffs which apply only to imports from the U.S. The company states that they intend to continue manufacturing bikes for the U.S. markets at their four existing plants in Wisconsin, Missouri and Pennsylvania.
Even before the tariff situation, Harley Davidson had already been undergoing a significant transformation as worldwide consumer demand for its large, V-Twin motorcycles ebbs. The company has plans to produce smaller, lighter motorcycles with engines between 250 and 500ccs of displacement, primarily for the Indian market and also has a modern electric motorcycle in the works that’s expected to debut in 2019.
In their most quarterly recent earnings release, Harley reported net earnings of $1.45/share on revenues of $1.71B, both of which beat the Zacks consensus estimates by about 7%, though those expectations had already been lowered and were a decline of 2% and 3% respectively when compared to 2017 results.
Gross margins, operating margins and income from financing activities were all lower than 2017.
Worldwide motorcycle retail sales at Harley Davidson were off 5.1%, with U.S. sales falling 8.7% and international sales growing 0.5%.
Harley Davidson is currently a Zacks rank #3 (Hold), but it’s not difficult to imagine downward revisions in the coming months as the trade wars grinds on.
Harley Davidson has stressed that the shift in manufacturing sites is not an attempt to reduce costs, but is intended only to avoid the crippling effect of the E.U tariffs, but that hasn’t saved them from the ire of president Trump who would like to see manufacturing grow in the U.S. rather than leave for foreign shores and who believes that their move undermines his hardline trade policies.
It’s a tough spot for them to be in. The likely financial effects of any boycotts are difficult to quantify, but the bad press can only be seen as a negative for sales in the U.S.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.