Harley-Davidson (HOG, Financial) has responded to recent assessments by Glass Lewis and Egan-Jones concerning the election of its Board of Directors at the company's upcoming 2025 Annual Meeting of Shareholders on May 14. These evaluations were issued following an endorsement from the independent proxy advisory firm ISS, which advised shareholders to support all of the company’s board nominees.
Harley-Davidson highlighted that Glass Lewis' report recognizes the impact of H Partners’ campaign. The company's Presiding Board Director emphasized that both Glass Lewis and Egan-Jones have overlooked the Board's effective management of Harley-Davidson’s ambitious Hardwire strategic plan and its commitment to strong corporate governance, as demonstrated by their thorough CEO selection process and continuous board updates. Despite challenging economic conditions, their strategy is reportedly leading to superior performance compared to competitors and generating shareholder value.
Additionally, there is concern that removing two independent directors, who possess crucial institutional knowledge for choosing an optimal CEO, alongside the current CEO dedicated to a smooth leadership transition, could pose significant risks and threaten shareholder interests.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Harley-Davidson Inc (HOG, Financial) is $28.80 with a high estimate of $32.00 and a low estimate of $24.00. The average target implies an upside of 23.56% from the current price of $23.31. More detailed estimate data can be found on the Harley-Davidson Inc (HOG) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, Harley-Davidson Inc's (HOG, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Harley-Davidson Inc (HOG, Financial) in one year is $27.96, suggesting a upside of 19.95% from the current price of $23.31. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Harley-Davidson Inc (HOG) Summary page.
HOG Key Business Developments
Release Date: May 01, 2025
- Operating Income Margin: 12.1% for the quarter.
- Global Retail Sales: Down 21% in Q1; North America down 24%, EMEA down 2%, APAC down 28%, LATAM down 6%.
- Global Wholesale Shipments: Down 33% at the end of Q1.
- Dealer Inventory: Down 19% globally; US inventory down 23%.
- HDFS Operating Income: Increased by 19% for the quarter.
- Consolidated Revenue: Down 23% in the first quarter.
- Consolidated Operating Income: $160 million, with a 51% decline at HDMC.
- First Quarter Earnings Per Share: $1.07.
- HDMC Gross Margin: 29.1%, down from 31.2% in the prior year period.
- Operating Expenses: $199 million, $24 million lower than prior year.
- LiveWire Operating Loss: $20 million.
- LiveWire Unit Sales: 33 units in Q1 compared to 117 units in the prior year.
- Operating Cash Flow: $142 million, up $38 million from the prior period.
- Total Cash and Cash Equivalents: $1.9 billion, $467 million higher than the prior year.
- Share Repurchases: 3.4 million shares bought back at a value of $87 million in Q1.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Harley-Davidson Inc (HOG, Financial) reported a better-than-expected operating income margin of 12.1% for the quarter, driven by strong product mix and tight cost control.
- The Financial Services business (HDFS) delivered a 19% increase in operating income, showcasing its strength and potential for further leveraging.
- The launch of the limited production CVO World light motorcycle received an outstanding response, with expectations to sell out from preorders.
- Harley-Davidson Inc (HOG) plans to introduce new entry-level products in smaller displacements, aiming to expand its portfolio and future growth.
- The company achieved $24 million in productivity savings in Q1, primarily from logistics and supply chain initiatives, contributing to its cost management efforts.
Negative Points
- Global retail sales were down 21% in Q1, with a significant 24% decline in North America, primarily due to low consumer confidence and an uncertain macro environment.
- The APAC region experienced a 28% retail decline, driven by softness in China and Japan, impacting overall sales performance.
- Harley-Davidson Inc (HOG) withdrew its 2025 financial guidance due to uncertainty in the macroeconomic and tariff environment.
- LiveWire, the company's electric motorcycle segment, faced challenges with lower unit sales and a slower-than-expected EV adoption rate.
- The company is dealing with significant tariff impacts, particularly from China, which could result in a $130 million to $175 million impact in 2025.
