zacks hd estimates reports

Download Zacks HD Estimates Reports

Post on 05-Apr-2018

214 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • 7/31/2019 Zacks HD Estimates Reports

    1/8

    2009 Zacks Investment Research, All Rights reserved. www.Zacks.com 111 North Canal Street, Chicago IL 60606

    Harley-Davidson Inc. (HOG-NYSE)

    SUMMARY

    SUMMARY DATA

    Risk Level * Below Avg

    Type of Stock Large-Growt

    Industry Auto -Domest

    Zacks Industry Rank * 218 out of 26

    Current Recommendation NEUTRAL

    Prior Recommendation Outperform

    Date of Last Change 07/13/2010

    Current Price (01/24/12) $43.32

    Target Price $45.00

    Harley-Davidson beat the Zacks Consensus Estimain the fourth quarter of 2011 by posting a profit of $0per share. Furthermore, its annual profit more thdoubled to $548.1 million or $2.34 per share. Tcompany expects to ship 240,000 to 245,0motorcycles globally to dealers and distributors in 201reflecting a 3% 5% increase from 2011, as it enjostrong brand loyalty through its franchise. HowevHarley-Davidson has an aging customer base. It ahas an expensive product range that attracts opremium consumers. These factors have led usmaintain our long-term Neutral recommendation a

    set a target price of $45.

    52-Week High $45.91

    52-Week Low $32.10

    One-Year Return (%) 11.02

    Beta 2.17

    Average Daily Volume (sh) 1,731,924

    Shares Outstanding (mil) 232

    Market Capitalization ($mil) $10,066

    Short Interest Ratio (days) 5.20

    Institutional Ownership (%) 84Insider Ownership (%) 1

    Annual Cash Dividend $0.50

    Dividend Yield (%) 1.15

    5-Yr. Historical Growth Rates

    Sales (%) -8.6

    Earnings Per Share (%) -29.1

    Dividend (%) -22.8

    P/E using TTM EPS 18.5

    P/E using 2012 Estimate 15.7

    P/E using 2013 Estimate 13.6

    Zacks Rank*: Short Term1 3 months outlook 3 - Hold

    * Definition / Disclosure on last page

    ZACKS CONSENSUS ESTIMATES

    Revenue Estimates(In millions of $ and excludes Financial Revenues)

    Q1 Q2 Q3 Q4 Year(Mar) (Jun) (Sep) (Dec) (Dec)

    2010 1,207 A 1,309 A 1,260 A 1,084 A 4,690 A

    2011 1,224 A 1,506 A 1,397 A 1,027 A 5,154 A

    2012 1,149 E 1,393 E 1,324 E 1,061 E 4,927 E

    2013 5,262 E

    Earnings Per Share Estimates(EPS is operating earnings before non-recurring items, but including employee

    stock options expenses)

    Q1 Q2 Q3 Q4 Year

    (Mar) (Jun) (Sep) (Dec) (Dec)

    2010 $0.29 A $0.59 A $0.40 A -$0.18 A $1.10 A2011 $0.51 A $0.81 A $0.78 A $0.24 A $2.34 A2012 $0.64 E $0.88 E $0.82 E $0.42 E $2.76 E2013 $3.18 E

    Projected EPS Growth - Next 5 Years % 11

    January 26, 2012

    http://www.zacks.com/
  • 7/31/2019 Zacks HD Estimates Reports

    2/8

    Equity Research HOG | Page 2

    RECENT NEWS

    Harley Beats, Annual Profit Doubles January 24, 2012

    Harley-Davidson Inc. posted a profit of $54.6 million or $0.24 per share in the fourth quarter of 2011 isharp contrast to a loss of $42.1 million or $0.18 per share in the same quarter of 2010. The profit wahigher than the Zacks Consensus Estimate of $0.22 per share.

    For the full year 2011, Harley s profit more than doubled to $548.1 million or $2.34 per share from $259.million or $1.10 per share in 2010. The profit was close to the Zacks Consensus Estimate of $2.34 peshare.

    The improvement in profits was attributable to the company s strong motorcycle sales and rebound consumer confidence in the U.S.

    Motorcycles and Related Products

    Revenues from Motorcycles and Related Products rose 12% to $1.03 billion, which compared with thZacks Consensus Estimate of $995 million. Revenues from motorcycle sales appreciated 13.5% t$791.9 million due to increase in shipments to 50,730 motorcycles in the quarter under study from 44,48

    motorcycles in the fourth quarter of 2010.

    Harley s worldwide dealer retail sales of new motorcycles escalated 10.9% globally to 40,359 unitincluding an 11.8% rise to 23,753 units in the U.S. and a 9.7% increase to 16,606 units in thinternational markets.

    For the full year, revenues from Motorcycles and Related Products rose 11.6% to $4.66 billion, whiccompared with the Zacks Consensus Estimate of $4.64 billion. Revenues from motorcycles sales wenup 13.3% to $3.55 billion on shipments of 233,117 units to dealers and distributors worldwide, reflecting 10.7% increase from 2010.

    Worldwide retail sales grew 5.9% to 235,188 motorcycles, including a 5.8% rise to 151,683 units in th

    U.S., and a 6.1% increase to 83,505 units in the international markets during the year. This comparewith the increase of 4.3% in industry-wide U.S. heavyweight motorcycle (651cc-plus) retail unit sales fothe full year.

    Revenues from Motorcycle Parts and Accessories (P&A) rose 7.9% to $161.2 million while revenuefrom General Merchandise, (including MotorClothes Apparel and Accessories) scaled up 12.8% to $69.million during the quarter.

    For the full year, P&A revenues increased 9% to $816.6 million. Meanwhile, revenues from GeneraMerchandise sales went up 5.8% to $274.1 million during the year.

    Gross margin was 31.2% in the quarter compared with 29.6% in the same quarter of 2010. Operatin

    margin from motorcycles and related products was 3.5% on operating income of $35.6 million comparewith an operating loss of $6.8 million in the fourth quarter of 2010. For the full year, gross margin wa33.4% and operating margin was 12.0%, compared with 34.2% and 9.1%, respectively in 2010.

    Harley-Davidson Financial Services (HDFS)

    The Financial Services segment recorded an operating income of $56.8 million in the quarter undestudy, a 30.6% increase from $43.5 million in the year-ago quarter. The increase in income wa

  • 7/31/2019 Zacks HD Estimates Reports

    3/8

    Equity Research HOG | Page 3

    attributable to continued improvement in credit performance at HDFS. For the full year, operating incomfrom financial services surged 47.8% to $268.8 million from $181.9 million in 2010.

    Restructuring Activities

    In 2011, Harley-Davidson realized cumulative savings of $217 million from restructuring activities thabegan in 2009, which is in line with company estimates of $210 million $230 million. Upon completionthe company continues to expect restructuring activities to generate annual ongoing savings of $31million to $335 million, beginning in 2014.

    For the full year 2011, Harley-Davidson incurred one-time restructuring charges of $68.0 million. Thcompany expects restructuring activities to result in one-time charges between $500 million and $52million through 2013, including $50 million to $60 million in 2012.

    Financial Position

    Harley s cash and cash equivalents totaled $1.53 billion as of December 31, 2011 compared with $1.0billion as of December 31, 2010. Total debt increased to $3.64 billion as of December 31, 2011 from$3.00 billion as of December 31, 2010 (all excluding debt held by variable interest entitiesConsequently, long-term debt to capitalization ratio deteriorated slightly to 60% as of December 31, 201from 57.6% as of December 31, 2010.

    In 2011, Harley had an operating cash flow of $885.3 million, a decrease from $1.16 billion in the prioyear. Meanwhile, capital expenditures increased to $189.0 million in the year from $170.8 million in 2010

    Share Repurchase

    Harley repurchased 3.5 million shares of common stock for $127.0 million during the quarter. At the enof 2011, the company had outstanding common stock of approximately 230.5 million and 18.6 millioshares remaining to be repurchased under the board-approved share repurchase authorizations.

    Outlook

    Harley-Davidson expects to ship 240,000 to 245,000 motorcycles globally to dealers and distributors i2012, reflecting a 3% 5% increase from 2011. In the first quarter of 2012, the company anticipates tship 58,000 to 63,000 motorcycles.

    For the full year, Harley-Davidson expects gross margin between 34.75% and 35.75%. The companalso expects capital expenditures between $190 million and $210 million in 2012, which includes $2million to support restructuring activities.

    VALUATION

    Currently, shares of Harley-Davidson are trading at 15.7X our 2012 EPS estimate of $2.76. Thcompany s current trailing 12-month earnings multiple is 18.5, compared with the 12.4 average for thpeer group and 13.9 for the S&P 500. Over the last five years, shares of Harley-Davidson have traded ia range of 3.6X to 66.3X trailing 12-month earnings. The stock is also trading at a premium to the peegroup, based on forward earnings estimates. The current P/E, which is in the lowest quartile of thhistorical range, is at a 43% premium to the peer group for 2012. Our long-term Neutral recommendatioon the stock indicates that it will perform in line with the market. Our $45 target price, 16.3X our 201EPS estimate, reflects this view.

  • 7/31/2019 Zacks HD Estimates Reports

    4/8

    Equity Research HOG | Page 4

    Key Indicators

    P/EF1

    P/EF2

    Est. 5-YrEPS Gr%

    P/CF(TTM)

    P/E(TTM)

    P/E5-Yr

    High(TTM)

    P/E5-YrLow

    (TTM)

    Harley-Davidson Inc. (HOG) 15.7 13.6 10.5 11.4 18.5 66.3 3.6

    Industry Average 11.0 23.2 15.6 8.2 12.4 75.8 5.5S&P 500 12.8 12.3 10.7 11.9 13.9 27.7 12.0

    PACCAR Inc. (PCAR) 13.4 10.7 23.5 15.2 18.8 157.7 8.8Ford Motor Co. (F) 8.2 6.9 8.1 3.3 6.3 68.8 4.8Tesla Motors Inc. (TSLA) N/A 59.0 25.0 N/A N/A N/A N/A

    TTM is trailing 12 months; F1 is 2012 and F2 is 2013, CF is operating cash flow

    P/BLastQtr.

    P/B5-Yr High

    P/B5-Yr Low

    ROE(TTM)

    D/ELast Qtr.

    Div YieldLast Qtr.

    EV/EBITDA(TTM)

    Harley-Davidson Inc.

    (HOG) 3.6 6.4 1.1 18.7 1.6 1.3 14.7

    Industry Average 4.2 4.2 4.2 45.3 3.3 0.5 1.8S&P 500 3.9 5.2 2.9 24.2 N/A 2.1 N/A

  • 7/31/2019 Zacks HD Estimates Reports

    5/8

    Eq

Recommended

View more >