NEW YORK (TheStreet) -- Harley-Davidson (HOG - Get Report) shares are down -3.1% to $68.14 on Wednesday after being downgraded to "market perform" from "strong buy" by analysts at Raymond James (RJF - Get Report).
The firm also lowered its full year EPS estimates for the company to $3.94 from $4 following a survey they conducted that indicated that sales during the second quarter fell below analysts 11% growth estimates.
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TheStreet Ratings team rates HARLEY-DAVIDSON INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HARLEY-DAVIDSON INC (HOG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HARLEY-DAVIDSON INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HARLEY-DAVIDSON INC increased its bottom line by earning $3.27 versus $2.71 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $3.27).
- HOG's revenue growth trails the industry average of 20.9%. Since the same quarter one year prior, revenues slightly increased by 9.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has significantly increased by 287.65% to $203.59 million when compared to the same quarter last year. In addition, HARLEY-DAVIDSON INC has also vastly surpassed the industry average cash flow growth rate of 40.62%.
- 45.76% is the gross profit margin for HARLEY-DAVIDSON INC which we consider to be strong. Regardless of HOG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HOG's net profit margin of 15.40% significantly outperformed against the industry.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.10% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: HOG Ratings Report