Is Harley-Davidson (HOG) Pricing Look Reasonable After Recent Share Price Weakness

• If you are wondering whether Harley-Davidson's current share price reflects its real worth, you are not alone. This article is designed to help you make sense of the numbers.
• The stock last closed at US$20.88, with returns of 1.9% over the past 7 days, a 7.2% decline over the past 30 days, 1.2% year to date, and a 25.7% decline over the past year.
• These mixed returns sit against a backdrop of ongoing interest in Harley-Davidson as an established motorcycle brand and a listed company, with investors regularly reassessing how its business prospects line up with its share price. Market attention has focused on how the company balances its heritage appeal with the need to stay relevant, which feeds into shifting expectations around what the stock should be worth.
• On our checks, Harley-Davidson scores 5 out of 6 for valuation, as shown by its valuation score. Next, we will look at how different valuation methods arrive at that result before finishing with a more holistic way to think about value.

Find out why Harley-Davidson's -25.7% return over the last year is lagging behind its peers.

Approach 1: Harley-Davidson Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash Harley-Davidson is expected to generate in the future, then discounts those cash flows back to what they could be worth in today's dollars.

In this case, the model used is a 2 Stage Free Cash Flow to Equity approach. Harley-Davidson's latest twelve month free cash flow is about $384.6 million. Analysts have a specific forecast of $424.6 million for 2026, and Simply Wall St then extrapolates cash flows further out with ten year projections ranging from about $424.6 million down to around $270.8 million, all discounted back to today.

Adding these discounted cash flows and a terminal value gives an estimated intrinsic value of US$22.31 per share. Compared to the recent share price of US$20.88, the DCF indicates the shares are trading at around a 6.4% discount, which suggests a mild gap rather than a deep value signal.

Result: ABOUT RIGHT

Harley-Davidson is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Harley-Davidson.

Approach 2: Harley-Davidson Price vs Earnings

The P/E ratio is a useful yardstick for a profitable company like Harley-Davidson because it links what you pay directly to the earnings the business is already generating. Investors typically expect a higher P/E when they see stronger growth potential or lower perceived risk, and a lower P/E when growth expectations are more muted or risks feel higher.

Right now, Harley-Davidson trades on a P/E of about 4.9x. That sits well below the Auto industry average of 18.5x and also below the broader peer group average of 24.6x. Simply comparing to those benchmarks can be helpful, but it treats all companies in the group as if they had the same growth outlook, profitability and risk profile.

To refine this, Simply Wall St uses a proprietary “Fair Ratio”, which estimates the P/E you might expect for Harley-Davidson after factoring in its earnings growth profile, industry, profit margins, market cap and company specific risks. This Fair Ratio is 11.1x, which is higher than the current 4.9x. That gap suggests the shares are trading below the multiple implied by these fundamentals.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Harley-Davidson Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your story about Harley-Davidson, tied to your assumptions for future revenue, earnings and margins. This then flows into a financial forecast, a fair value, and a clear comparison between that fair value and the current price, all within an easy tool on Simply Wall St's Community page that millions of investors already use. Narratives update automatically when new news or earnings arrive. One investor might build a Narrative that sees Harley-Davidson worth US$34.00 based on stronger margin recovery and brand progress, while another might land closer to US$27.00 by focusing more on demand risks and tariff costs. Both can instantly see how their own fair value stacks up against the latest market price to decide whether the stock looks expensive or cheap on their terms.

Do you think there's more to the story for Harley-Davidson? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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