Harley-Davidson (HOG): Assessing Valuation After a Recent 10% Monthly and 19% Quarterly Share Price Drop

Harley-Davidson (HOG) has been drifting lower, with the stock down about 10% over the past month and roughly 19% in the past 3 months, raising fresh questions about value versus risk.

See our latest analysis for Harley-Davidson.

Zooming out, Harley-Davidson’s share price has slid meaningfully this year, and with a one year total shareholder return of around minus 25%, the recent weakness suggests momentum is still fading rather than turning.

If this pullback has you reassessing auto names, it could be a good moment to compare Harley-Davidson with other auto manufacturers and see where the market is still pricing in growth.

With earnings under pressure and the share price lagging, Harley-Davidson now trades at a discount to analysts’ targets. The key question is whether this signals a mispriced value opportunity or whether the market is correctly bracing for weaker growth ahead.

Most Popular Narrative: 11.5% Undervalued

With Harley-Davidson last closing at $24.43 against a narrative fair value of $27.60, this perspective argues the market is discounting its earnings power too sharply.

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

Read the complete narrative.

Curious how falling revenues can still support richer margins, a lower future earnings multiple, and ongoing buybacks at the same time? Discover the full playbook behind this valuation call and see which assumptions really carry the weight in that $27.60 fair value.

Result: Fair Value of $27.60 (UNDERVALUED)

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

However, sustained weak retail demand and slower than hoped EV adoption could easily derail those margin gains and constrain the upside in Harley-Davidson’s valuation.

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

Another View: Cash Flow Says the Stock Is Rich

While the narrative fair value casts Harley-Davidson as 11.5% undervalued, our DCF model points the other way, putting fair value nearer $22.31, below the current $24.43 share price. If cash flows are right and not the narrative, is this really a margin of safety or a value trap?

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 920 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 see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A great starting point for your Harley-Davidson research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Do not stop your research with one company when the market is full of opportunities that could fit your strategy even better than Harley-Davidson today.

• Capture long term value potential by reviewing these 920 undervalued stocks based on cash flows that the market may be mispricing right now.
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• Strengthen your income stream by focusing on these 14 dividend stocks with yields > 3% that can support more reliable cash returns.

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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