Harley-Davidson (HOG) Stock Rises Today on Analyst Upgrade

NEW YORK (TheStreet) -- Shares of Harley-Davidson Inc  (HOG) are higher by 1.85% to $68.90 in Friday's pre-market trading session, after the motorcycle company was upgraded to "buy" from "neutral" by analysts at Goldman Sachs this morning.

Analysts at the firm also boosted its price target to $81 from $66 per share, after its channel checks indicated U.S. retail sales accelerated in the month of October.

Goldman analysts added that they expect Harley-Davidson's new products to drive improved revenue growth.

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Milwaukee, WI-based Harley-Davidson is the parent company for the groups of companies doing business as Harley-Davidson Motor Company and Harley-Davidson Financial Services.

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 a number of strengths, 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 notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • 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.
  • HARLEY-DAVIDSON INC's earnings per share declined by 5.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($3.87 versus $3.27).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.7%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 43.46% 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 11.52% compares favorably to the industry average.
  • Net operating cash flow has declined marginally to $396.28 million or 8.99% when compared to the same quarter last year. Despite a decrease in cash flow HARLEY-DAVIDSON INC is still fairing well by exceeding its industry average cash flow growth rate of -21.26%.
  • You can view the full analysis from the report here: HOG Ratings Report

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