HOG
Harley-Davidson, Inc.
Consumer Cyclical · Auto - Recreational Vehicles
Undervalued·Quality 60·RSI 68·DCF +155%·Conviction 70
Investment Thesis — Harley-Davidson, Inc.
The market is overly focused on Harley-Davidson's declining traditional ICE sales and aging demographic, leading to a deeply pessimistic valuation. This overlooks the company's strategic pivot towards profitability, international expansion, and the hidden value of its LiveWire investment, which together imply a significant earnings recovery not reflected in the current price.
Catalysts
- Stronger-than-expected Q3/Q4 earnings reflecting 'Hardwire' strategy benefits (profitability over volume).
- Successful launch of new, more accessible models attracting younger demographics.
- Positive developments or valuation uplift for LiveWire (e.g., new product, strategic partnership, market re-rating of EV pure-plays).
Risk Factors
- Prolonged economic recession impacting discretionary consumer spending on big-ticket items.
- Failure to attract new, younger riders, exacerbating the aging demographic challenge.
- Intensified competition from other motorcycle brands or alternative leisure activities.
Key Debates
HOG P/S re-rates to 0.6x by Q3 FY25 as revenue decline reverses
Gross Margin expands to 28% by Q4 FY24 through premium mix
P/B re-rates above 0.75x by Q3 FY25 from asset optimization