HOG - Harley-Davidson shoots higher after dazzling Morgan Stanley at anniversary event

2023-07-18 11:03:20 ET

Morgan Stanley rode away from the Harley-Davidson ( NYSE: HOG ) Investor Day event in Milwaukee impressed with the upside potential for the company. Thousands of Harley-Davidson riders rode in from around the world for the event, which was also commemorating the 120th anniversary of the company.

The motorcycle giant used the occasion to unveil the company's new CVO motorcycles, which are described as an aspirational collection of limited-production motorcycles that had been in development for three years. The collaboration between top tier engineering and design teams at Harley-Davidson is said to have led to the company delivering the highest tech touring motorcycle in the world.

As for investors, Morgan Stanley's positive thesis on Harley-Davidson is based on it continuously innovating, expanding motorcycle total addressable market, and delivering art along with profitability.

Analyst Adam Jonas kept an Overweight rating on HOG, with a price target of $50. HOG is noted to be still seeing the benefits of HardWire's restructuring actions, as well as focusing more on core product revival with a greater emphasis on price/mix rather than chasing incremental volume.

Jonas and his team believe an incentivized management will push a more resilient HOG, with many of the headwinds already priced in. MS forecasts HOG EPS to reach $4.67 this year and $4.88 in FY24. The firm's $50 target implies 9.1X 2025 PE and 5.6xX2025 EV/EBITDA.

Shares of Harley-Davidson ( HOG ) gained 2.21% on Tuesday. HOG still trades below its 100-day and 200-day moving averages. The stock is well liked on Wall Street, with 7 Buy-equivalent ratings stacking up against 8 Hold-equivalent ratings and no Sell-equivalent ratings.

More on Harley-Davidson:

• Harley-Davidson: Seems Like A Value Trap
• Harley-Davidson stock dips as UBS flags cautious dealer checks
• Growth metrics on Harley-Davidson
• Seeking Alpha's Quant Rating for Harley-Davidson

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