Interesting Read On The HD State Of Affairs

Discussion in 'General Harley Davidson Topic' started by Dr. Dolittle, Jan 12, 2009.

  1. Dr. Dolittle

    Dr. Dolittle Experienced Member Contributor Retired Moderators

    SAN FRANCISCO (MarketWatch) -- Harley-Davidson Inc. shares skidded 12% Monday as analysts grew more skittish about motorcycle purchases in a downbeat economy.

    Goldman Sachs chopped Harley's shares to sell, slashing its price target to $11, and whacking its 2009 profit outlook in half. RBC Capital Markets also took a more bearish stance, dropping its share-price target to $16 and cutting its profit outlook for this year.

    Analysts at both brokerage houses used to have a price target of $30. Shares of the Milwaukee-based "hog" maker closed at $14.13.

    Goldman analyst Patrick Archambault said he expects Harley's retail bike sales to fall by 30% this year, making it the worst year for new registrations since 1982.

    In a research note, he said losses on stocks and real-estate investments will hurt the "higher-income demographic that accounts for a large part of the Harley-Davidson customer base."

    Harley (HOG) is slated to report fourth-quarter earnings Jan. 23. At last check, analysts projected Harley's profit to drop 26% to 58 cents a share. Sales are pegged to fall 7% to $1.3 billion from the year-earlier period, according to a FactSet Research.

    Recent executive departures -- one planned, another immediate -- aren't helping to boost the morale of Harley shareholders.

    Chief Executive Officer James Ziemer said Dec. 15 that he plans to retire this year, capping a 40-year run with the company. On Thursday, Sy Naqvi quit as interim president of the motorcycle maker's finance unit, which helps consumers fund purchases of bikes.

    Analysts had been flagging Harley-Davidson Financial Services as an area of concern. The unit is expected to make much less money, take on more delinquent loans, and be forced to find new sources of funding as the secondary market to sell its loans is dried up.

    "Within several months, we think it's entirely possible that the company will have promising new leadership and lower expectations," wrote RBC analyst Edward Aaron. "In the interim, however, investors could have to take some pretty tough medicine, including meaningful production cuts, possible restructuring and maybe even a cut to the dividend."

    Harley-Davidson just paid a quarterly dividend of 33 cents a share.

    Shares are down 65% over the past year
  2. glider

    glider Veteran Member

    I say bring them to their knees, they've been riding the gravy boat for long enough. Let the shareholders take a hit instead of the customers.

    About time that the MOCO listened to the customers and their problems of the overpriced bikes and poor customer/dealer service instead of worrying about the dividends.

    Get an 800 number and an email address and pretend to care !!!

    Free Harleys for everybody!!! :lolrolling

    Oh, I feel sooooo much better now! :D
  3. lwos

    lwos Account Removed

    This doom and gloom forecast isnt just for's for everyone. All bikes, snowmobile, boat, waverunners and even Auto's are going to be going through some tough times. I'm sure production will be reduced and loans will be hard to come by.....but even Toyota is shutting even that giant is feeling some pain.
    If Harley can get talented people to take over, I can see them coming back in 2-3 years, along with the economy and auto industry. But 2009 and 2010 are going to be tough years.
  4. krikket

    krikket Active Member

    2009 and 2010 will be very hard years!!:nosad But it's going to be on a global level. Everything has been way over-valued, and now it's coming back to bite us. However, people are resilient and resourceful, so we will pull through. I hate being apocalyptic......:(
  5. lwos

    lwos Account Removed

    And I'll tell you one thing........ I'll not listen to one of those yahoo's up on Wall Street. The were wrong when they said the price of oil was all about supply and demand, they were behind the housing bubble and a bunch of other crapola. If HD stock gets low enough, I'll buy some shares, because like they did back in the 1980's and 1990's.....they'll make a comeback.
  6. eleft36

    eleft36 Junior Member

    Mostly logical, you are blaming the wrong yahoo's for the housing bubble.

  7. STEVE07

    STEVE07 Well-Known Member Staff Member Super Moderators

    If you re-read that report as well as the MOCO quarterly report they are not excactly on their knees.Their profit and profit outlook has dropped,but they are still making a profit unlike the big three automakers.Also if you read their quarterly report you will find that the company has cash reserves that are staggering.Let the anylists downgrade it then buy stock if you can afford it.JMO
    Last edited: Jan 13, 2009
  8. gunnut

    gunnut Junior Member

    Harley Davidson ,like America,will remain a beacon in the darkness to me and many of us on this side of the pond,especially those of us who have to stick this moronic self elected "Government"(I use the term loosely)"led" by the great pretender Gordon Brown.
    Seriously,HD make a great motorcycle,and this will pull them thru.
  9. Crambo

    Crambo Active Member

    Six months ago the prime minister of spain José Luis Rodríguez-Zapatero stated on national television that there was NO crisis, all this said with a big toothy taco eating grin, and then during his televised christmas speech to the nation he stated that the worst was over, then to deliberately take their minds off it all (believe me it ain't difficult, just do this :small3d021:) he cap's it off with promising more money to the elderly, equal rights for women and bulls (but not in that order) and free paella and brylcreem for everyone...:yahoo
    What beggers belief is the majority of people here in spain believe him, talk about gullible...:small3d031:
  10. threesteps

    threesteps Junior Member

    Same story, different company. I don’t have any particular sympathy for the MOCO. They are “spoiled” in many ways. We have been overcharged for HD products and we know many dealers can’t even spell service. :newsmile03:

    You gotta be kidding, analysts are worried about MOCO loans…….duh. Don’t get me wrong, a lot of folks who were not higher risk for loans are now in financial straights due to layoffs, etc. But……….a lot of loans were given whose soundness was shaky from the beginning…..sound familiar.

    What I do have sympathy for is the workers at MOCO who have been laid off and retirees who’s 401Ks are basically shot. Hopefully, the downturn in HD stock will be relatively short.

    If we are lucky, real lucky, HD will do something about pricing and service. Somehow, I doubt it.