Harley-Davidson's stock rallies after earnings beat, big buyback plans

By Tomi Kilgore

Harley plans to spend $1 billion on stock repurchases through 2026, or more than 20% of current market cap

Shares of Harley-Davidson Inc. cruised toward a nice gain Thursday, after the motorcycle maker reported a big quarterly earnings beat and announced a new $1 billion share repurchase program.

The new repurchase program, which the company plans to complete through 2026, represents about 21% of Harley's current market capitalization of $4.79 billion.

The stock (HOG) ran up as much as 11.2% intraday to a three-month high, before paring gains to be up 5.1% in morning trading.

Net income for the second-quarter to June 30 rose to $218.3 million, or $1.63 a share, from $178 million, or $1.22 a share, in the same period a year ago, to beat the FactSet consensus for earnings per share was $1.40.

Revenue grew 12% to $1.62 billion, above the FactSet consensus of $1.38 billion.

For Harley-Davidson Motor Company, motorcycle revenue climbed 20% to $1.07 billion to top expectations of $939.4 million, while parts and accessories revenue fell 10.1% to $194 million.

Revenue growth got a boost from a 15.9% increase in motorcycle shipments to 49,700 units, partially offset by lower pricing.

For 2024, the company now expects Harley-Davidson Motor Company revenue to be down 5% to 9%, compared with previous guidance of flat to down 9%, but kept its outlook for operating income growth unchanged at flat to up 5%.

CFRA analyst Garrett Nelson cut his stock price target to $35 from $40, as the company lowered its revenue outlook despite the second-quarter beat.

"We maintain a hold opinion, as concerns regarding results for the balance of the year largely overshadows a very strong quarter from HOG," Nelson wrote in a note to clients.

The stock has shed 3.3% year to date, while the S&P 500 index SPX has advanced 14.3%.

-Tomi Kilgore

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07-25-24 1138ET

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