Harley-Davidson, Inc. (HOG) Stock Rises On Upgrade


Harley-Davidson, Inc. (NYSE:HOG) received a boost to its stock today as BMO Capital Markets’ analyst Gerrick Johnson raised both his earnings estimates and his price target for the Wisconsin-based and last remaining American motorcycle maker. Harley-Davidson’s latest offerings have brought a strong consumer response that Johnson believed warranted an upgrade. The manufacturer has come a long ways from the early 80’s when only a zero-hour intervention by the federal government under Reagan saved it from extinction.


Public’s response to Harley-Davison motorcycles

Dealers have rapidly sold through their allocations of Harley-Davidson, Inc. (NYSE:HOG)’s newest models Johnson noted in his report. The public’s response to Harley-Davidson’s “Rushmore” touring motorcycles has been glowing and the cycles are receiving rave reviews for comfort, styling, power, and new features.

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Johnson believes that the Street is not yet realizing the impact of demand in its consensus earnings estimates. He’s calling for an increase beyond the consensus for both the remainder of this year as well as 2014.

Harley shares trading up

The analyst raised his 2013 earnings forecast to $3.49 from $3.45 a share and increased his 2014 forecast to $4.10 from $4 a share. Analysts polled by FactSet, on average, are predicting earnings of $3.29 a share for 2013 and $3.87 a share for 2014. Johnson also said he expects earnings of $4.65 a share in 2015, whereas market expectations are for $4.53 per share.

Johnson already had an Outperform rating for the stock but raised his target from $65 to $74.

Shares of Harley-Davidson, Inc. (NYSE:HOG) jumped $1.21 to $65.68 in afternoon trading, outpacing a broader market uptick. Its shares hit $65.59 earlier in the day, nearing its 52-week trading high of $65.86.

As of this writing (1:52 PM New York), Harley is trading up $1.19 at $65.66 or a gain on the day of 1.85 percent.