HOG: New Leadership Will Drive Inventory Clearance And Future Margin Recovery

The analyst price target for Harley-Davidson has edged down by $0.10 as analysts factor in weaker retail demand, ongoing inventory clearance related margin pressure, and mixed views on the pace of recovery despite recent management actions to improve dealer health.

Analyst Commentary

Recent Street research reflects a divided view on Harley-Davidson's outlook, with some emphasizing operational progress and others highlighting structural headwinds that could weigh on valuation and earnings power.

Bullish Takeaways

• Bullish analysts highlight the new CEO's inventory reduction initiatives and renewed focus on dealer health as important execution improvements that can support healthier margins over time.
• Improving sequential trends in U.S. retail demand are viewed as an early sign that core demand may be stabilizing, supporting the case for multiple support despite near term volatility.
• Some see the post earnings reset in expectations and lower price targets as creating a more attractive risk reward skew for long term investors if management delivers on its recovery plan.
• Efforts to rebuild trust across the dealer network are considered critical for sustaining brand strength and unlocking future unit growth as macro conditions improve.

Bearish Takeaways

• Bearish analysts have sharply reduced EPS forecasts for the next several years, citing a weaker retail backdrop and ongoing margin pressure from inventory clearance that could cap earnings recovery.
• Concerns persist that mix shift toward lower priced models next year will dilute profitability, limiting upside to margins even if volumes stabilize.
• Some view Harley-Davidson as structurally disadvantaged within the broader leisure space, pointing to limited pricing power and negative secular trends that constrain long term growth.
• Lowered price targets and a move to more cautious ratings signal that consensus estimates may still be too high, implying further downside risk to valuation if demand fails to reaccelerate.

What's in the News

• Harley-Davidson unveiled select models from its 2026 motorcycle lineup online, including new Street Glide and Road Glide Grand American Touring bikes, with additional 2026 models and the limited-production CVO collection set for a second reveal in January 2026 (company product announcement).
• The company introduced a new Solo Trim Package for the 2026 Heritage Classic, Street Bob, and Street Glide models, positioning these bikes at lower entry prices while emphasizing rider safety enhancements and the Milwaukee-Eight 117 powertrain (company product announcement).
• Harley-Davidson continued to diversify beyond motorcycles with a limited-edition H-D x Realtree “Get Lost” apparel collaboration, featuring camo-themed shirts, caps, and utility pants available through U.S. dealerships and online (company product announcement).
• From July 1, 2025 to November 4, 2025, Harley-Davidson repurchased about 3.44 million shares for $99.69 million, completing an 8.26 percent buyback totaling $300.72 million under its July 2024 authorization (company buyback update).
• The Board of Directors amended and restated the company’s by-laws effective September 23, 2025, signaling ongoing adjustments to Harley-Davidson’s corporate governance framework (company governance filing).

Valuation Changes

• Fair Value: edged down slightly to $27.50 from $27.60, reflecting modestly weaker earnings expectations.
• Discount Rate: unchanged at 12.5 percent, indicating no shift in the assumed risk profile or cost of capital.
• Revenue Growth: revised modestly higher to approximately -6.06 percent from -6.09 percent, implying a slightly less negative near term sales outlook.
• Net Profit Margin: trimmed marginally to about 10.21 percent from 10.21 percent, signaling a negligible change in long run profitability assumptions.
• Future P/E: decreased slightly to roughly 9.92x from 9.96x, pointing to a minor reduction in the valuation multiple applied to forward earnings.