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After Harley-Davidson, Inc.'s (NYSE:HOG) earnings announcement in March 2019, analysts seem fairly confident, as a 5.3% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of -12%. Currently with trailing-twelve-month earnings of US$531m, we can expect this to reach US$560m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Harley-Davidson in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Harley-Davidson going to perform in the near future?
The 18 analysts covering HOG view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HOG's earnings growth over these next few years.
By 2022, HOG's earnings should reach US$612m, from current levels of US$531m, resulting in an annual growth rate of 5.5%. This leads to an EPS of $3.68 in the final year of projections relative to the current EPS of $3.21. In 2022, HOG's profit margin will have expanded from 9.3% to 12%.
Future outlook is only one aspect when you're building an investment case for a stock. For Harley-Davidson, I've compiled three key factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Harley-Davidson worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Harley-Davidson is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Harley-Davidson? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.