Harley-Davidson hosted an analyst/investor event at ESPN’s Summer X-Games last week in an effort to showcase its outreach marketing efforts.
Gerrick Johnson of BMO Capital Markets shared with Powersports Business his insights from the event:
- “Management was very upbeat about its ongoing outreach strategy and very optimistic about the prospects of the new Street 500 and 750 motorcycles, which are the centerpiece in the effort to lure new riders, particularly young adults, minorities and urbanites. In fact, management did not try to hide its exuberance nor did it attempt to manage expectations, calling this new line of motorcycles a ‘home run’ and ‘absolute winner.’”
- “We rate the shares of HOG Outperform with an $80 price target. This target represents a 17x multiple on our 2015 EPS estimate of $4.80. This is a premium to the company’s historical average forward P/E of 15x, but we think appropriate given the 20 percent EPS growth rate we expect over the next two years. Risks to our target include a decline in consumer confidence and spending, or an inability to being new products to market on a timely basis.”
- “We are reducing our 2014 EPS estimate slightly to $3.95 from $4.00, as 2Q retail sales have snapped back from the winter doldrums more slowly in some markets than we had originally anticipated. While we think Street motorcycles will be in high demand, production will be limited in 2014 and, thus, would not represent an opportunity for near-term upside. We are leaving our 2015 EPS estimate of $4.80 unchanged.”