A Fresh Look at Harley-Davidson (HOG) Valuation Following Recent Share Price Declines

Harley-Davidson (HOG) shares have seen pressure lately, with the stock down around 12% over the past 3 months. Investors are considering the company’s recent performance and what it could mean for the rest of the year.

See our latest analysis for Harley-Davidson.

Harley-Davidson’s 12% slide over the past three months extends a broader downtrend, with a 1-year total shareholder return of -23% and the stock now trading at $24.71. Although there have not been major headlines driving the move, sentiment appears cautious as momentum remains soft compared to recent years.

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With persistent declines in both share price and profit growth, investors are left wondering: is Harley-Davidson now trading below its true value, or is the market already accounting for subdued prospects ahead?

Most Popular Narrative: 15.8% Undervalued

With Harley-Davidson trading at $24.71 and a fair value of $29.33 according to the most popular narrative, the market appears to be overlooking key elements that could drive future upside. This context sets the stage for a closer look at the logic fueling these valuation assumptions.

The new partnership in HDFS unlocks significant cash ($1.25B) and reduces leverage, enabling accelerated share buybacks and freeing up $300M for growth investments. This can directly bolster EPS and future revenue streams through both financial engineering and new business initiatives.

Read the complete narrative.

Want to know why analysts are doubling down on Harley’s ability to fund growth and boost profits? Behind the scenes, they’re modeling a major transformation, with cash injections and accelerated investments paving the way for a bolder future. The math driving this narrative may surprise you, especially when you see which profit projections and revenue shifts are doing the heavy lifting.

Result: Fair Value of $29.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak demand and a heavy reliance on aging core customers could quickly undermine Harley-Davidson’s optimism as it looks ahead.

Find out about the key risks to this Harley-Davidson narrative.

Another View: Discounted Cash Flow Says Overvalued

While the analyst consensus sees Harley-Davidson as undervalued, our SWS DCF model comes to a very different conclusion. Based on this approach, the stock is trading well above its estimated fair value of $9.77. This suggests potential downside risk rather than a hidden bargain. Which outlook do you trust more?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Harley-Davidson for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 905 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Harley-Davidson Narrative

If you want to dig deeper or build your own take on Harley-Davidson's outlook, you can easily create a personalized narrative from the data at hand in just minutes. Do it your way

A great starting point for your Harley-Davidson research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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