Will Harley-Davidson (HOG) Stock be Impacted by Electric Motorcycle Delay?

NEW YORK (TheStreet) -- Harley-Davidson Inc.'s (HOG) LiveWire battery powered motorcycle, which was announced a year ago, is not likely to hit the market for possibly two or three more years, the company's new CEO Matt-Levatich said in an interview, The Wall Street Journal reports.

The battery-powered motorcycles were demonstrated around the U.S. and in Europe and are part of the company's efforts to engage young adults and lower its dependence on what The Wall Street Journal calls "aging baby boomers."

The prototypes have an aluminum body and emit a low-pitched whine, which is described as quitter than a lawnmower, contrasting the bike's traditional rumble.

The company is waiting on improvements in battery technology in order for the LiveWire to give customers the performance they expect from the company's product, Harley's CEO told The Journal.

"Will we get to that Nirvana that customers say they want? Probably not," he said to The Journal. "Will we get close enough? I believe we will."

As for the launch of the bike Levatich said "not in the next couple years but it's not past 2020 either, unless we run into some impossible barrier."

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 few notable 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, expanding profit margins, growth in earnings per share, increase in net income and attractive valuation levels. 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:

  • 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.
  • 47.74% 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 16.13% significantly outperformed against the industry average.
  • HARLEY-DAVIDSON INC's earnings per share improvement from the most recent quarter was slightly positive. 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 $3.87 versus $3.27 in the prior year. This year, the market expects an improvement in earnings ($4.00 versus $3.87).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Automobiles industry average. The net income increased by 1.5% when compared to the same quarter one year prior, going from $265.92 million to $269.85 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.3%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: HOG Ratings Report

If you liked this article you might like

Closing Bell: LIVE MARKETS BLOG

Closing Bell: LIVE MARKETS BLOG

Harley-Davidson CEO: In a Lot of Ways We Are a Stronger Company

Harley-Davidson CEO: In a Lot of Ways We Are a Stronger Company

Dow Tumbles 362 Points; S&P 500 and Nasdaq Also Finish Lower

Dow Tumbles 362 Points; S&P 500 and Nasdaq Also Finish Lower

Closing Bell: LIVE MARKETS BLOG

Closing Bell: LIVE MARKETS BLOG

These Stocks Are Getting Roughed Up in Tuesday's Market Selloff

These Stocks Are Getting Roughed Up in Tuesday's Market Selloff