Harley-Davidson on Cusp of Major Turnaround, Says Wall Street Analyst
While everyone else piles on Harley-Davidson and its many troubles, one person sees a couple of reasons for hope.
The many financial woes Harley-Davidson has soldiered through in recent years are well documented. And sadly, it seems like many people are actually rooting for the iconic motorcycle maker to go under. Regardless, MoCo continues to fight the good fight. That includes overhauling its lineup with a variety of new models in an attempt to broaden its appeal. And at least one person thinks that the company is on the cusp of a major turnaround as a result.
That person is Citigroup analyst Shawn Collins, who released a report this week that gives Harley-Davidson stock (HOG) a buy rating, according to Barron’s. Given the fact that H-D’s stock has remained in the gutter for some time now, it’s a bold move. But Collins has two major reasons behind his convictions – that super low valuation, and Harley’s new CEO, Jochen Zeitz.
“The new CEO has done this once at PUMA sporting goods. And we are optimistic that he can orchestrate a stabilization (or turnaround) of the company’s operations,” Collins said in his report. Zeitz managed a stunning turnaround during his time at the helm of PUMA. Over a period of five or so years, he tripled both the company’s stock price and sales. Now, after taking over the top spot at Harley-Davidson, he’s looking to do it again.
Zeitz is known for his marketing savvy, and that’s precisely what H-D needs right now. The company has thus far struggled to appeal to younger riders, a move that’s critical to keeping it afloat into the years ahead. But at Harley’s incredibly low stock price, Collins doesn’t believe that it’ll take much for individual investors to make a little money, regardless.
“[W]e find the risk/reward compelling that a turnaround can take place at Harley-Davidson,” Collins said. “At current valuation levels, Harley does not need to gain significant market share or grow new lines of business in order reward an investor.”
In the world of Wall Street, trading for a profit is a much less daunting task than rebuilding a major manufacturing company. But it’s still rather encouraging to see someone express confidence in Harley-Davidson rather than the typical negative outlook. And truthfully, why wouldn’t everyone want to see one of America’s most iconic brands not only survive the toughest stretch of its life, but thrive, too?
Photos: Harley-Davidson
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