Harley-Davidson (HOG) is Investable Again, Analyst Exclaims
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Rating Summary:
9 Buy, 15 Hold, 4 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 20 | Down: 14 | New: 22
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Harley-Davidson (NYSE: HOG) is lower today (-3.5%) following yesterday's earnings, effectively ignoring a bullish call from Morgan Stanley which claimed the stock is 'investable again.'
"For the first time in nearly 6 months, HOG is seen as investable again vs. a lowered bar of expectations and at 15x PE is a good, if not great, value," Morgan Stanley's Adam Jonas said.
The analyst said the 2015 outlook was a relief. "4Q results were in line with consensus and a bit worse than our expectations, as gross margins came in around 300 bps below our forecast in part due to foreign exchange pressure. The 2015 outlook for volume growth, 18-19% OP margins in the motorcycle segment and a 35.5% tax rate imply an EPS of around $4.25… around 3% below consensus but not as bad as the market feared. Heading into the quarter, investors were getting increasingly anxious about the impact of a dramatically stronger US$ for an almost entirely US$ based manufacturer with 35% of revenues exported to international markets. HOG management provided just enough disclosure on the FX exposure and the impact on results to improve transparency on the issue."
The firm is lowring 2015 and 2016 EPS estimates by 3% and 11% respectively to $4.25 and $5.10. The firm cut their price target to $71 from $74.
For an analyst ratings summary and ratings history on Harley-Davidson click here. For more ratings news on Harley-Davidson click here.
Shares of Harley-Davidson closed at $64.60 yesterday.
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