BMO Capital Markets analyst Gerrick Johnson attended the Harley-Davidson investor day in Milwaukee on Tuesday, where the company outlined its strategy and plans for the next 3, 5 and 10 years.
“The event was bold and optimistic, but light on specifics. The key, we believe, is the cadence of new product. As we've seen in other powersports segments, new product sells,” Johnson reports.
Here are some outtakes from his research note provided to Powersports Business on Wednesday:
“Management was feisty and in ‘go get 'em!’ mode, seemingly energized after a meeting with the President last month. And as referenced in Trump's address to Congress last night, HOG may be his model corporate American citizen with the most to benefit in the near term from his policies and support. We think the Trump presidency has also inspired HOG's core ‘red state’ base.
“New product sells; new innovation can't be bought from the competition or in the used markets. The company plans 50 new high impact motorcycles over the next 5 years, 100 new over 10 years. Building on good critical success the last two model years.”
“For the 2017 season, it is still too early but the recent warm weather in the East and Midwest has encouraged some action in these markets. Riders like the Milwaukee-Eight engine and we expect a nice release of pent up demand this spring driving worldwide retail sales growth of 3.9 percent in 1Q and 3.4 percent for the year. The only governor on upside would be the inability to move old 2016 inventory that currently clogs the channel.”