Shares of motorcycle manufacturer Harley-Davidson (HOG) closed 7.2% lower on Wednesday despite its strong second-quarter 2021 financial results. The Wisconsin-based company makes touring, custom and cruiser motorcycles.
Adjusted earnings per share (EPS) totaled $1.41, surpassing analysts’ expectations of $1.17. The company had reported a loss of $0.38 per share in the second quarter of 2020.
Quarterly revenue increased 77% year-over-year to $1.53 billion, beating the Street’s estimates of $1.42 billion. The rise was driven by growth in the Motorcycles and Related Products segment.
Global retail motorcycle sales jumped 24% to 65,300 units; revenue from the Motorcycles and Related Products segment almost doubled to $1.3 billion; and Financial Services segment revenue climbed 2% to $201 million.
The Chairman, President and CEO of Harley-Davidson, Jochen Zeitz, said, “We are encouraged by the signs of consumer positivity in the market; however, we remain mindful of the significant supply chain challenges that we expect to continue to impact the sector.”
For full-year 2021, Harley-Davidson expects Motorcycles segment revenue to grow by 30% to 35%. (See Harley stock chart on TipRanks)
On July 19, RBC Capital analyst Joseph Spak maintained a Hold rating on the stock with a price target of $48 (18.1% upside potential). The analyst expects the company to report EPS of $1.69 in the third quarter.
Overall, the stock has a Moderate Buy consensus based on 8 Buys, 2 Holds and 1 Sell. The average Harley-Davidson price target of $54.10 implies 33.1% upside potential. The company’s shares have gained nearly 42% over the past year.
According to TipRanks’ Smart Score rating system, Harley-Davidson scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.