Analyst provides Harley-Davidson Streetfighter expectations
In a research note provided to Powersports Business, BMO Capital Markets analyst Gerrick Johnson confirms that Harley-Davidson recently removed its Bronx Streetfighter motorcycle from its Future Vehicles page on its website. The inference in the Harley community had been that the Bronx would not be released for MY2021, which the company has since confirmed. The bike has not been canceled, only delayed. This is negative to its 2021 financial model, as BMO had assumed shipment of 1,550 units of these motorcycles.
Johnson reports BMO Capital Markets research indicates, “We think it is the right move to focus Harley’s 2021 middleweight efforts on the very strong adventure touring market with its Pan-American, its first new bike in the segment, which is still planned to be released for MY2021.
“The Pan American is an adventure touring motorcycle, and as we’ve seen across our leisure coverage, anything outdoor-related has experienced robust demand. The Motorcycle Industry Council (MIC) pegs retail growth in the “dual” motorcycle segment over 250cc in the US at +25% in the second quarter.
“Meanwhile, the road bike market has been softer. According to the MIC, the sport bike segment over 705cc experienced retail growth of +7% in 2Q. Thus, we think it makes sense to delay the Bronx streetfighter motorcycle and initially focus on the Pan American and the adventure touring, or dual, market.
“We had previously estimated 3,050 middleweight motorcycles to be shipped in 2021, with 1,550 of those the Bronx model. By eliminating these units and pushing the release to MY2022, we are reducing our 2021E revenue by $17 million and EPS by just one cent as we anticipated the motorcycle, with marketing and launch costs, was not likely to be very profitable in year one.
“We are also reducing our 2022 revenue estimate by $18 million to $4.322 billion and EPS estimate by $0.02 per share to $3.23 at this time. We expect the release of the Bronx to now occur in MY2022. We had expected the distribution of the Bronx model to about double to 3,000 units. With the shift in launch date we are pulling 1,450 Bronx units from our 2022 model.”
