The trade war between the United States and the European Union (EU) is escalating, with the EU announcing €26 billion worth of retaliatory tariffs on American goods. This move comes shortly after the United States imposed 25% tariffs on steel and aluminum imports from the EU. Unlike before, the United States is not offering exemptions for products that are not available domestically.The EU’s countermeasures are set to take effect in two phases, on April 1 and April 13, and will affect primary American expor ...

Core Viewpoint - Harley-Davidson, Inc. will present at Citi's 2025 Global Consumer & Retail Conference, highlighting its ongoing engagement with investors and stakeholders [1] Company Background - Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services, aiming to lead the motorcycle industry through innovation and emotional connection [2] - The company has a vision of maintaining its status as the most desirable motorcycle brand globally, emphasizing a lifestyle that includes customizable motorcycles, experiences, accessories, and apparel [2] - Harley-Davidson Financial Services offers financing and insurance programs to support riders [2] - The company holds a controlling interest in LiveWire Group, Inc., the first publicly traded all-electric motorcycle company in the U.S., which aims to become the leading electric motorcycle brand [2]

Core Viewpoint - Harley-Davidson, Inc. will present at the Bank of America Consumer & Retail Conference on March 12, 2025, discussing company insights and answering questions [1] Company Background - Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services, aiming to be the most desirable motorcycle brand globally [2] - The company has been defining motorcycle culture since 1903, offering customizable motorcycles, experiences, accessories, riding gear, and apparel [2] - Harley-Davidson Financial Services provides financing, insurance, and other programs to support riders [2] - The company holds a controlling interest in LiveWire Group, Inc., the first publicly traded all-electric motorcycle company in the U.S., focusing on urban adventure and electric motorcycle innovation [2]

Core Insights - Harley-Davidson reported a wider-than-expected adjusted loss of 93 cents per share for Q4 2024, compared to a consensus estimate of a loss of 68 cents, and a profit of 18 cents per share in the same quarter last year [2] - Consolidated revenues fell 35% year-over-year to $688 million, driven by significant declines in motorcycle sales and related products [2][3] Financial Performance - Revenues from the Motorcycle and Related Products segment dropped 47% year-over-year to $420 million, missing forecasts due to lower motorcycle shipments [3] - Worldwide motorcycle shipments decreased by 15% to 25,700 units, falling short of estimates [3] - Revenues from motorcycle sales alone plummeted 60% year-over-year to $231 million, with an operating loss of $214 million, significantly worse than the previous year's loss of $44 million [3] Regional Sales Performance - Retail motorcycle units sold globally decreased by 14.9% year-over-year, with North America sales down 4% to 15,127 units [4] - Sales in EMEA declined by 7%, while Asia Pacific and Latin America saw drops of 26% and 7%, respectively [4] Other Revenue Streams - Parts and accessories revenues fell 10% year-over-year to $118 million, but exceeded estimates [5] - Apparel revenues decreased by 6% to $54 million, also beating projections [5] - Harley-Davidson Financial Services reported revenues of $257 million, up 4% year-over-year, but missed forecasts [5] LiveWire Segment - LiveWire shipments fell 54% to 236 units, with revenues declining 32% to $10 million [6] - Operating loss for LiveWire narrowed to $26 million, better than projections [6] Financial Position - Selling, general, and administrative expenses decreased to $210.5 million from $225.5 million year-over-year [7] - Cash and cash equivalents increased to $1.59 billion, while long-term debt decreased to $4.47 million [7] 2025 Guidance - For 2025, Harley-Davidson expects revenues from HDMC to remain flat to down 5% year-over-year, with an operating income margin of 7-8% [8] - LiveWire segment anticipates wholesale units between 1,000-1,500 and an operating loss of $70-$80 million [9] Market Sentiment - Estimates for Harley-Davidson have trended downward, with a consensus estimate shift of -46.08% [10] - The company currently holds a subpar Growth Score of D and a Momentum Score of F, but an A on the value side, resulting in an aggregate VGM Score of C [11] - Harley-Davidson has a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [12]

Group 1 - Harley-Davidson, Inc. manufactures and sells motorcycles and related products globally, with 63% of unit sales in the United States in 2024 [1] - The company generates sales across various regions including EMEA, APAC, and Canada [1] Group 2 - The investment philosophy focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1]

Group 1: Harley-Davidson - Harley-Davidson is facing significant challenges with a negative return of 23.8% over the last five years, compared to an S&P 500 gain of 85.1% [2] - Revenue declined 35% year over year in Q4 2024 to $688 million, with full-year 2024 revenue down 11% to $5.84 billion [2] - The motorcycle segment saw a 47% decline in revenue year over year in Q4, and total motorcycle shipments fell by 53% [2] - Total net income for 2024 was $445 million, marking a 35% decline year over year, with a loss of $118.43 million in Q4 [3] - Sales have been in relative decline since 2015, with 2015 being the highest-selling year since 2010 [4] - The 2025 outlook is bleak, with expectations for flat or down revenue by as much as 5%, and financing expected to decline by 10% to 15% [5] Group 2: Kraft Heinz - Kraft Heinz has struggled for years to achieve meaningful growth, with a 3% decline in net sales for full-year 2024 and a 2.2% decline in diluted earnings per share [6] - The company anticipates flat sales or a decline of up to 2.5% in 2025, with adjusted operating income expected to decrease by 1% to 4% [7] - Despite a 21% increase in net income in 2023, earnings declined in 2024, indicating challenges in sustaining profit growth from stagnant sales [8] - Over the last five years, Kraft Heinz has underperformed the market by 44%, lacking momentum for stock growth [9]

Core Insights - Harley-Davidson, Inc. will present at the Raymond James 46th Annual Institutional Investors Conference on March 5, 2025, with CFO Jonathan Root and Investor Relations Director Shawn Collins participating in sessions [1] Company Background - Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services, aiming to lead the motorcycle industry through innovation and emotional connection [2] - The company has been defining motorcycle culture since 1903, offering customizable motorcycles, accessories, riding gear, and apparel [2] - Harley-Davidson Financial Services provides financing and insurance programs to support riders [2] - The company holds a controlling interest in LiveWire Group, Inc., the first publicly traded all-electric motorcycle company in the U.S., focusing on urban adventure and electric motorcycle branding [2]

Financial Performance - Harley-Davidson, Inc. reported total revenue of $5.19 billion for the year ended December 31, 2024, a decrease of 11.1% compared to $5.84 billion in 2023[327]. - The net income attributable to Harley-Davidson, Inc. for 2024 was $455.4 million, down 35.5% from $706.6 million in 2023[327]. - The company's motorcycle and related products revenue was $4.15 billion in 2024, a decline of 15.0% from $4.88 billion in 2023[327]. - Operating income for 2024 was $416.6 million, a significant decrease of 46.5% from $779.1 million in 2023[327]. - Basic earnings per share (EPS) for 2024 was $3.46, down from $4.96 in 2023, reflecting a decline of 30.2%[327]. - Comprehensive income attributable to Harley-Davidson, Inc. for 2024 was $427.6 million, compared to $743.6 million in 2023, indicating a decrease of 42.5%[330]. - The financial services segment generated revenue of $1.04 billion in 2024, an increase of 8.9% from $953.6 million in 2023[327]. - Total revenue for the Company in 2024 was $5,186.8 million, a decrease of 11.1% from $5,836.5 million in 2023[364]. Assets and Liabilities - Total assets decreased from $12,140,554 thousand in 2023 to $11,881,579 thousand in 2024, a decline of approximately 2.1%[333]. - Total liabilities decreased from $8,887,746 thousand in 2023 to $8,726,159 thousand in 2024, a reduction of about 1.8%[333]. - Long-term debt, net decreased from $4,990,586 thousand in 2023 to $4,468,665 thousand in 2024, a decline of approximately 10.4%[333]. - The total equity attributable to Harley-Davidson, Inc. decreased from $3,252,808 thousand in 2023 to $3,166,047 thousand in 2024, a decline of about 2.7%[333]. - The current portion of long-term debt, net increased from $577,203 thousand in 2023 to $683,272 thousand in 2024, representing an increase of about 18.4%[335]. - The company reported a net cash used by investing activities of $383,330 thousand in 2024, compared to $512,304 thousand in 2023, indicating a decrease of approximately 25.2%[338]. Cash Flow and Investments - Net cash provided by operating activities rose significantly from $754,887 thousand in 2023 to $1,063,833 thousand in 2024, an increase of approximately 40.8%[338]. - Cash and cash equivalents increased from $1,533,806 thousand in 2023 to $1,589,608 thousand in 2024, representing a growth of about 3.6%[333]. - The company repurchased common stock worth $459,829 thousand in 2024, compared to $363,987 thousand in 2023, an increase of approximately 26.4%[338]. - The company repurchased 12.5 million shares for $450.0 million in 2024, compared to 10.2 million shares for $350.0 million in 2023[388]. Derivative Financial Instruments - The notional U.S. dollar value of outstanding foreign currency contracts was $455.3 million, down from $540.1 million in 2023, indicating a decrease of approximately 15.7%[294]. - The notional value of derivative financial instruments used to hedge commodity prices was $4.2 million as of December 31, 2024, down from $6.3 million in 2023, reflecting a reduction of 33.3%[295]. - HDFS had an interest rate cap with a notional value of $273.0 million outstanding at December 31, 2024, significantly reduced from $617.9 million in 2023, a decrease of 55.8%[297]. - The notional value of cross-currency swaps was $759.8 million at December 31, 2024, down from $1.42 billion in 2023, indicating a decrease of 46.5%[300]. - The notional value of derivative financial instruments designated as cash flow hedging instruments was $1,215,765 in 2024, with assets valued at $19,837 and liabilities at $34,857[427]. - The company utilizes derivative financial instruments to manage risks related to foreign currency exchange rates, interest rates, and commodity prices[421]. Credit Losses and Receivables - The allowance for credit losses (ACL) for retail finance receivables was $378.4 million as of December 31, 2024, against a retail receivable portfolio totaling $6.7 billion[322]. - The allowance for doubtful accounts was $3.4 million as of December 31, 2024, compared to $2.1 million in 2023, indicating an increase of 61.9%[348]. - Retail finance receivables in the U.S. decreased to $6.5 billion in 2024 from $6.7 billion in 2023, representing a decline of 7.0%[401]. - The allowance for credit losses increased to $401.2 million in 2024 from $381.9 million in 2023, reflecting a rise of 5.9%[408]. - The company experienced increased retail credit losses in 2024 due to macroeconomic factors, including higher motorcycle payments and inflationary pressures[406]. Pension and Benefits - The Company has a defined benefit pension plan with a benefit obligation of $1,568.3 million as of December 31, 2024, up from $1,553.9 million in 2023[479]. - The total accumulated benefit obligation (ABO) for all pension and SERPA plans combined was $1.51 billion in 2024, compared to $1.57 billion in 2023[484]. - The service cost for pension and SERPA benefits was $4.698 million in 2024, down from $5.174 million in 2023[485]. - The interest cost for pension and SERPA benefits decreased to $80.478 million in 2024 from $81.911 million in 2023[485]. - The expected return on plan assets for pension plans was $132.574 million in 2024, compared to $146.076 million in 2023[485]. International Expansion and Market Risks - LiveWire plans to expand its business internationally, which is expected to increase its exposure to currency rate risk as it grows its international presence[296]. - The Company selectively uses derivative financial instruments to manage market risks, including foreign currency exchange rates, commodity prices, and interest rates[293]. - The Company’s HDMC segment operating results are significantly affected by fluctuations in the value of the U.S. dollar relative to foreign currencies, particularly the Euro and Australian dollar[294]. Tax and Regulatory Matters - The income tax provision for 2024 was $71.963 million, a decrease of 58% from $171.830 million in 2023[3]. - The total gross amount of unrecognized tax benefits at the end of 2024 was $16.179 million, down from $18.214 million at the end of 2023[383]. - The company had deferred income tax assets of $342.593 million and deferred income tax liabilities of $183.656 million as of December 31, 2024[379].

Core Viewpoint - Harley-Davidson has announced a cash dividend increase of 4.3% for Q1 2025, reflecting its financial strength and commitment to shareholder value, despite recent stock underperformance [1][2]. Financial Performance - The dividend is set at 18 cents per share, with a forward yield of 2.8%, payable on March 14, 2025, to shareholders of record as of February 28, 2025 [1]. - Harley-Davidson shares have declined by 30.7% over the past 12 months, underperforming the Zacks Auto-Tires-Trucks sector's growth of 11.3% and the Zacks Automotive – Domestic industry's return of 25.9% [2][3]. - The S&P 500 index has increased by 23.2% during the same period [2]. Market Position and Growth - The company is enhancing its market position through an innovative product portfolio, with a nearly 5% growth in the U.S. driven by the successful launch of the '24 Street Glide and Road Glide models, pushing market share to nearly 75% [6]. - Six new cruisers and updates to existing models are improving Harley-Davidson's competitive edge [7]. - Strategic marketing efforts and collaborations are increasing brand visibility and consumer engagement [8]. - The LiveWire unit, focusing on e-bikes, has seen a 46% year-over-year increase in global retail sales, maintaining a 65% market share in the U.S. electric motorcycle segment [9]. Valuation - Harley-Davidson shares are currently considered undervalued, with a Value Score of A, trading at a forward price/sales ratio of 0.79x compared to the sector's 1.48x [10]. 2025 Outlook - The company anticipates flat retail sales for 2025, with a 5% decline in wholesale shipments as it manages dealer inventory [13]. - Global inventory levels are expected to decrease by over 10% by the end of 2025, with a 30% reduction in the first half [13]. - Revenue projections for Harley-Davidson Motor Company are expected to be flat to down 5%, while Harley-Davidson Financial Services anticipates a 10% to 15% drop in operating income [14]. - The Zacks Consensus Estimate for 2025 revenues is $4.14 billion, indicating a decline of 0.14% year-over-year, with EPS expected to be $3.44, down 18.1% over the past 30 days [16].

Market Overview - Wall Street is experiencing volatility due to persistent inflation, uncertainty regarding the Federal Reserve's rate-cut trajectory, and concerns over a potential trade war [1] - The auto sector faces additional challenges from potential U.S. tariffs on Canadian and Mexican imports, although these duties were temporarily paused [1] Dividend-Paying Stocks - Dividend-paying stocks are seen as a stable investment option for cautious investors seeking steady income [2] - Several auto stocks, including Harley-Davidson, Magna International, Oshkosh Corp., PACCAR, and Group 1 Automotive, have recently increased their first-quarter 2025 dividends [2] Harley-Davidson - Harley-Davidson raised its quarterly dividend by 4.3% to $0.18 per share, resulting in a dividend yield of 2.80% and a payout ratio of around 20% [3] - The company anticipates flat retail sales for 2025, with wholesale shipments expected to decline by 5% and global inventory projected to drop over 10% [4] - The Zacks Consensus Estimate for Harley-Davidson's 2025 EPS is $3.44, reflecting a decrease of $0.76 over the past 30 days [5] Magna International - Magna International increased its quarterly dividend by 2% to $0.485 per share, translating to a dividend yield of 5% and a payout ratio of around 35% [6] - The company is implementing restructuring and cost-cutting measures due to macroeconomic pressures, leading to a revised 2026 sales outlook [7] - The Zacks Consensus Estimate for Magna's 2025 EPS implies growth of 13% [8] Group 1 Automotive - Group 1 Automotive raised its quarterly dividend by 6.3% to $0.50 per share, resulting in a dividend yield of 0.4% and a sustainable payout ratio of 5% [10] - The company has increased dividends 12 times in the last five years, with an annualized growth rate of 12.5% [10] - The Zacks Consensus Estimate for Group 1's 2025 sales and EPS implies growth of 10% and 4.4%, respectively [12] Oshkosh Corporation - Oshkosh raised its quarterly dividend by 11% to $0.51 per share, yielding 1.90% with a payout ratio of around 16% [14] - The company has a strong balance sheet and is expanding its offerings through acquisitions, although it faces short-term softness in its Access segment [15] - The Zacks Consensus Estimate for Oshkosh's 2025 sales and EPS implies a decline of 2.4% and 6.6%, respectively [17] PACCAR - PACCAR increased its quarterly dividend by 10% to $0.33 per share, resulting in a dividend yield of 1.25% and a payout ratio of around 15% [18][19] - The company is poised for growth due to strong demand for its vehicles and strategic expansion initiatives, despite facing significant capital expenditures [20] - The Zacks Consensus Estimate for PACCAR's 2025 sales implies a 0.5% increase year over year, while EPS estimates suggest a 4.2% decline [21]