Harley-Davidson up 15% on Tuesday: what’s fuelling the stock?

on Feb 8, 2022
  • Harley-Davidson Inc swung to a surprise profit in its fiscal fourth quarter.
  • The motorcycle manufacturer gave better-than-expected full-year guidance.
  • Shares of the U.S. company jumped close to 15% on Tuesday morning.

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Shares of Harley-Davidson Inc (NYSE: HOG) are up nearly 15% on Tuesday as the motorcycle company reported an unexpected profit for its fiscal fourth quarter.

What the earnings report tells us

Harley-Davidson said its net income printed at $21.6 million that translates to 14 cents per share. In the comparable quarter of last year, it was still in $96.4 million of loss or 63 cents per share. On an adjusted basis, the American motorcycle manufacturer earned 15 cents per share.

The Wisconsin-based company generated $1.016 billion in revenue versus the year-ago figure of $725 million. According to FactSet, experts had forecast 34 cents of per-share loss on $669 million in revenue.

Also on Tuesday, BofA Securities reiterated its “buy” rating on HOG with a price target of $70 per share that represents over 70% upside from here. In December, Harley-Davidson said its EV unit will list on the New York Stock Exchange.

Guidance for the full financial 2022

For the full financial year, Harley-Davidson now forecasts a 5.0% to 10% growth in its motorcycles and related products revenue from fiscal 2021’s $4.54 billion. Its guidance assumes supply constraints will ease in the back half of 2022 and exceeds Wall Street expectations.

In the earnings press release, the NYSE-listed firm said it is committed to using the cash on hand to fund growth via its Hardwire initiatives. Harley-Davidson will also execute discretionary stock buybacks and pay dividends to shareholders. CEO Jochen Zeitz said:

We delivered a strong finish to the year, in which we’ve seen proof points on all elements of our Hardwire Strategy. Looking ahead, we’re fully committed to achieving our long-term Hardwire Strategy, as the most desirable motorcycle brand and company in the world.