Harley-Davidson (HOG) Stock Price Target Lowered at Barclays

Harley-Davidson's (HOG) price target was lowered to $50 from $64 at Barclays on Monday.
By Amanda Albright ,

NEW YORK (TheStreet) -- Barclays lowered its price target on Harley-Davidson (HOG) - Get Report  to $50 from $64 on Monday. The firm maintained its "equal weight" rating on the stock.

The Milwaukee-based motorcycle company's management has said it expects the business to grow in 2016, but Harley-Davidson faces challenges that could take time to overcome, Barclays said.

Used bike sales continue to outpace new bike sales and new product launches have generated lower than expected mindshare among the core customer, the firm said. 

"While management is unilaterally focused on gaining back share in the US and driving growth worldwide via a 5-point plan, Harley-Davidson has a lot of wood to chop, in our view, and management's expectations for near-term recovery are too optimistic," Barclays added.

Shares of Harley-Davidson closed down by 1.13% to $49.72 on Monday afternoon. 

Separately, TheStreet Ratings team rates HARLEY-DAVIDSON INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate HARLEY-DAVIDSON INC (HOG) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Automobiles industry and the overall market, HARLEY-DAVIDSON INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 47.03% is the gross profit margin for HARLEY-DAVIDSON INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.65% is above that of the industry average.
  • Net operating cash flow has slightly increased to $407.01 million or 2.70% when compared to the same quarter last year. Despite an increase in cash flow, HARLEY-DAVIDSON INC's average is still marginally south of the industry average growth rate of 12.35%.
  • HARLEY-DAVIDSON INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HARLEY-DAVIDSON INC increased its bottom line by earning $3.87 versus $3.27 in the prior year. For the next year, the market is expecting a contraction of 5.4% in earnings ($3.66 versus $3.87).
  • You can view the full analysis from the report here: HOG

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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