On Dec 2, we reiterated the Neutral recommendation on
). Although the company has various positive drivers, we are
concerned about its aging customer base, expensive products and
Why the Reiteration?
Harley-Davidson posted a 23.7% year-over-year rise in earnings
to 73 cents per share in the third quarter of 2013 from 59 cents
a share. Earnings topped the Zacks Consensus Estimate by a
The company reported positive earnings surprise in the last
four quarters with an average beat of 2.29%. However, 10 out of
14 analysts covering the stock reduced their 2013 earnings
estimate over the last 60 days, while 3 of them revised upwards.
As a result, the Zacks Consensus Estimate for Harley-Davidson's
2013 earnings per share inched down 0.3% to $3.27, up 20.04% year
Harley-Davidson commands roughly 56.5% of the U.S. heavyweight
motorcycles market, providing scale advantages over most
competitors. Moreover, the company's motorcycle shipments are
increasing over time, while the restructuring initiatives are
However, Harley-Davidson has an aging customer base. The
company has not been able to attract younger generations, who are
driven toward smaller and cheaper bikes. Also, the company has an
expensive product range, which attracts only premium consumers.
Moreover, its close competitors have more diverse product lines
and are greater in size than Harley-Davidson, which operates in a
Other Stocks to Consider
Harley-Davidson currently carries a Zacks Rank #3 (Hold). Some
better-ranked automobile stocks worth considering are
Ford Motor Co.
Honda Motor Co., Ltd.
). While Ford is a Zacks Rank #1 (Strong Buy) stock, Daimler and
Honda hold a Zacks Rank #2 (Buy).
DAIMLER AG (DDAIF): Get Free Report
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
HARLEY-DAVIDSON (HOG): Free Stock Analysis
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