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Here's Why You Should Retain Harley Davidson in Your Portfolio Now
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Key Takeaways
HOG is reshaping operations and focusing on high-potential markets after exiting unprofitable regions.
Harley-Davidson expects $1.2-$1.25B cash unlock to cut debt, fund buybacks and support initiatives.
Tariffs, cost inflation and uneven dealer inventories are pressuring HOG margins and clouding guidance.
Harley-Davidson (HOG - Free Report) , one of the world’s leading motorcycle manufacturers, focuses primarily on high-potential markets in North America, Europe, and select regions of the Asia-Pacific, while benefiting from its multi-year productivity and cost program. However, rising tariffs, persistent cost inflation, and poor operating leverage pose near-term challenges for the company.
Let’s find out why HOG stock is worth retaining at the moment.
Operating Revamp, LiveWire Performance & Cost Regulations Aid HOG
Harley-Davidson has formed long-term strategic partnerships with KKR and PIMCO for Harley-Davidson Financial Services (“HDFS”) to enhance the company’s financial service strategies. These partnerships are also expected to materially improve HDI’s capital structure, with management projecting $1.2-$1.25 billion of discretionary cash to be unlocked by first-quarter 2026 following the back-book loan sale and related actions.
This significant cash inflow could be used to reduce debt (with a $450 million target), accelerate buybacks ($200 million ASR under the $1 billion repurchase program through 2026), or fund targeted product and dealer initiatives. Additionally, the shift to a capital-light, fee/servicing model is expected to improve HDFS’ ROE over time and reduce earnings volatility from finance receivable holdings.
Harley-Davidson's revamped operating model and streamlined organizational structure have enhanced efficiency and effectiveness across all functions. After exiting unprofitable markets, the company now focuses on high-potential regions, primarily in North America, Europe and select Asia-Pacific regions.
HOG aims to strengthen its market position while driving productivity and reducing supply-chain costs, along with highlighting sportier bikes and modern marketing techniques.Harley-Davidson’s electric-focused LiveWire unit continues to strengthen its position in the performance EV space, encouraged by its flagship models — LiveWire One and Del Mar, along with S4 Honcho launch and a stronger product pipeline including Sprint and Sprint-adjacent bikes for 2026.
Cost regulation is considered a key component of Harley-Davidson’s multi-year productivity cost program. It is also a central initiative under the Hardwire strategy, which aims to deliver $400 million in improvements by 2025. From 2022 through 2024, the company realized $257 million in unlevered productivity savings and remains on track to achieve an additional $100 million in 2025 and 2026. These sustained cost efficiencies support margin resilience and enhance long-term profitability.
Harley-Davidson’s debt reduction strategy continues to show progress. As of Sept. 30, 2025, the company’s long-term debt was $3.1 billion, down from $4.5 billion as of 2024-end. Harley-Davidson’s long-term debt-to-capital ratio is now at a more manageable level of around 0.46. This provides the company with greater financial flexibility and the ability to pursue growth initiatives.
HOG Exposed to Tariffs and Inventory Challenges
Tariffs are materially compressing HOG gross margins due to uncertain environment. HDMC’s gross margin declined to 26.4% in the third quarter from 30.1% last year, with tariffs alone costing $27 million in the quarter and $45 million year to date through the third quarter, and expected to reach $55-$75 million for full-year 2025.
The unfavorable operating leverage and lingering cost inflation pressures will continue to weigh on profitability. Importantly, Harley-Davidson withheld 2025 guidance for HDMC due to tariff and trade-policy uncertainty — an overhang that may keep investor sentiment cautious until there is more clarity.
Global dealer motorcycle inventories are down 13% year over year, while Touring and CVO inventories remain flat, representing the primary areas of concern for Harley-Davidson. The company has implemented targeted promotions and provided local dealer tools to move Touring inventory, but uneven family-level stock poses a risk. Shipments may need to be increased to clear Touring stock, which could pressure pricing, or dealers might delay orders if macroeconomic or policy uncertainties persist.
Harley-Davidson, Inc. Price, Consensus and EPS Surprise
The Zacks Consensus Estimate for REVG’s fiscal year earnings is pegged at $3.72 per share, indicating a year-over-year rise of 37.8%. REV’s earnings beat the Zacks ConsensusEstimate in each of the trailing four quarters, with an average surprise of 22.1%.
The Zacks Consensus Estimate for FSS current year earnings is pegged at $4.15 per share, indicating a year-over-year rise of 24.2%. FSS earnings beat the Zacks ConsensusEstimate in each of the trailing four quarters, with an average surprise of 5.5%.
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Here's Why You Should Retain Harley Davidson in Your Portfolio Now
Key Takeaways
Harley-Davidson (HOG - Free Report) , one of the world’s leading motorcycle manufacturers, focuses primarily on high-potential markets in North America, Europe, and select regions of the Asia-Pacific, while benefiting from its multi-year productivity and cost program. However, rising tariffs, persistent cost inflation, and poor operating leverage pose near-term challenges for the company.
Let’s find out why HOG stock is worth retaining at the moment.
Operating Revamp, LiveWire Performance & Cost Regulations Aid HOG
Harley-Davidson has formed long-term strategic partnerships with KKR and PIMCO for Harley-Davidson Financial Services (“HDFS”) to enhance the company’s financial service strategies. These partnerships are also expected to materially improve HDI’s capital structure, with management projecting $1.2-$1.25 billion of discretionary cash to be unlocked by first-quarter 2026 following the back-book loan sale and related actions.
This significant cash inflow could be used to reduce debt (with a $450 million target), accelerate buybacks ($200 million ASR under the $1 billion repurchase program through 2026), or fund targeted product and dealer initiatives. Additionally, the shift to a capital-light, fee/servicing model is expected to improve HDFS’ ROE over time and reduce earnings volatility from finance receivable holdings.
Harley-Davidson's revamped operating model and streamlined organizational structure have enhanced efficiency and effectiveness across all functions. After exiting unprofitable markets, the company now focuses on high-potential regions, primarily in North America, Europe and select Asia-Pacific regions.
HOG aims to strengthen its market position while driving productivity and reducing supply-chain costs, along with highlighting sportier bikes and modern marketing techniques.Harley-Davidson’s electric-focused LiveWire unit continues to strengthen its position in the performance EV space, encouraged by its flagship models — LiveWire One and Del Mar, along with S4 Honcho launch and a stronger product pipeline including Sprint and Sprint-adjacent bikes for 2026.
Cost regulation is considered a key component of Harley-Davidson’s multi-year productivity cost program. It is also a central initiative under the Hardwire strategy, which aims to deliver $400 million in improvements by 2025. From 2022 through 2024, the company realized $257 million in unlevered productivity savings and remains on track to achieve an additional $100 million in 2025 and 2026. These sustained cost efficiencies support margin resilience and enhance long-term profitability.
Harley-Davidson’s debt reduction strategy continues to show progress. As of Sept. 30, 2025, the company’s long-term debt was $3.1 billion, down from $4.5 billion as of 2024-end. Harley-Davidson’s long-term debt-to-capital ratio is now at a more manageable level of around 0.46. This provides the company with greater financial flexibility and the ability to pursue growth initiatives.
HOG Exposed to Tariffs and Inventory Challenges
Tariffs are materially compressing HOG gross margins due to uncertain environment. HDMC’s gross margin declined to 26.4% in the third quarter from 30.1% last year, with tariffs alone costing $27 million in the quarter and $45 million year to date through the third quarter, and expected to reach $55-$75 million for full-year 2025.
The unfavorable operating leverage and lingering cost inflation pressures will continue to weigh on profitability. Importantly, Harley-Davidson withheld 2025 guidance for HDMC due to tariff and trade-policy uncertainty — an overhang that may keep investor sentiment cautious until there is more clarity.
Global dealer motorcycle inventories are down 13% year over year, while Touring and CVO inventories remain flat, representing the primary areas of concern for Harley-Davidson. The company has implemented targeted promotions and provided local dealer tools to move Touring inventory, but uneven family-level stock poses a risk. Shipments may need to be increased to clear Touring stock, which could pressure pricing, or dealers might delay orders if macroeconomic or policy uncertainties persist.
Harley-Davidson, Inc. Price, Consensus and EPS Surprise
Harley-Davidson, Inc. price-consensus-eps-surprise-chart | Harley-Davidson, Inc. Quote
HOG’s Zacks Rank & Key Picks
HOG currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are REV Group (REVG - Free Report) and Federal Signal (FSS - Free Report) . At present, REVG sports a Zacks Rank #1 (Strong Buy), while FSS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for REVG’s fiscal year earnings is pegged at $3.72 per share, indicating a year-over-year rise of 37.8%. REV’s earnings beat the Zacks ConsensusEstimate in each of the trailing four quarters, with an average surprise of 22.1%.
The Zacks Consensus Estimate for FSS current year earnings is pegged at $4.15 per share, indicating a year-over-year rise of 24.2%. FSS earnings beat the Zacks ConsensusEstimate in each of the trailing four quarters, with an average surprise of 5.5%.