NEW YORK (TheStreet) -- Harley-Davidson (HOG) shares are are up 5.14% to $59.57 in morning trading on Thursday after the motorcycle maker had its long term and short term rating maintained by credit ratings firm Moody's (MCO).
The firm said that while Harley-Davidson's decision to take on debt to finance its proposed $750 million share buyback program is a credit negative event, Moody's is maintaining its A3 long-term rating, Prime-2 short-term rating and stable outlook on Harley-Davidson Financial Services remain unchanged.
Separately, analysts at UBS upgraded the stock to "buy" from "neutral" with a $63 price target today due to the expanded share repurchase program.
The company announced that it is adding 20 million shares to its buyback program.
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 ($3.99 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 7.1%. 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