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What Do Analysts Think About The Future Of Harley-Davidson, Inc.'s (NYSE:HOG)?

Simply Wall St

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Harley-Davidson, Inc.'s (NYSE:HOG) latest earnings announcement in December 2018 revealed that the company benefited from a small tailwind, leading to a single-digit earnings growth of 1.9%. Today I want to provide a brief commentary on how market analysts view Harley-Davidson's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Harley-Davidson

Market analysts' prospects for this coming year seems pessimistic, with earnings falling by -7.6%. But in the following year, there is a complete contrast in performance, with earnings growth rates reaching double digit 11% compared to today’s level before plateauing to US$583m in 2022.

NYSE:HOG Past and Future Earnings, April 1st 2019

While it’s helpful to understand the growth year by year relative to today’s figure, it may be more insightful estimating the rate at which the earnings are rising or falling on average every year. The pro of this method is that we can get a bigger picture of the direction of Harley-Davidson's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 4.0%. This means that, we can assume Harley-Davidson will grow its earnings by 4.0% every year for the next few years.

Next Steps:

For Harley-Davidson, there are three important aspects you should further examine:

  1. 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.
  2. Valuation: What is HOG 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 HOG is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HOG? 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 editorial-team@simplywallst.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.