On Mar 20, we maintained our Neutral recommendation on
) based on its better performance in the fourth quarter of 2012,
despite the challenges from the aging customer base and strong
HONDA MOTOR (HMC): Free Stock Analysis Report
HARLEY-DAVIDSON (HOG): Free Stock Analysis
STRATTEC SEC CP (STRT): Free Stock Analysis
GENTHERM INC (THRM): Free Stock Analysis
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On Jan 29, 2013, Harley-Davidson posted a 29.2% rise in earnings
per share to 31 cents in the fourth quarter of 2012 from 24 cents
in the same quarter of 2011. The EPS was in line with the Zacks
Consensus Estimate. Net income grew 29.3% to $70.6 million from
$54.6 million in the fourth quarter of 2011.
However, consolidated revenues in the quarter inched down 0.8% to
$1.17 billion in the quarter due to announced plans for lower
shipments related to the implementation of seasonal surge
production at York facility in the first half of 2013.
Nevertheless, it was higher than the Zacks Consensus Estimate of
Following the release of the fourth quarter 2012 results, the
Zacks Consensus Estimate for 2013 declined 1.2% to $3.33 per
share. Meanwhile, the Zacks Consensus Estimate was unchanged at
$3.85 for 2014. Harley-Davidson currently retains a Zacks Rank #3
Harley-Davidson enjoys a scale advantage over its peers as it
commands 50% market share in the U.S. It operates 706 independent
dealers in the U.S., of which 55% exclusively market its
products. Harley-Davidson has a network of 1,468 dealers across
Harley-Davidson benefits from the restructuring activities
incorporated in 2009. In 2012, the company realized savings of
$280.0 million from these restructuring activities. Upon
completion of these activities in 2013, Harley-Davidson expects
savings of $305.0 million in the year and annual ongoing savings
of $320.0 million beginning in 2014.
However, Harley-Davidson faces challenges from its aging customer
base. The young generation is more attracted toward smaller and
cheaper bikes manufactured by Japanese manufacturers
Honda Motor Co.
), Suzuki and Yamaha.
Other Stocks to Consider
Few stocks that are performing well in the industry where
Harley-Davidson operates include
STRATTEC Security Corporation
). Both are a Zacks Rank #1 (Strong Buy) stocks.