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Stock of the Week: Harley-Davidson

Times a-changin’.

Andrew Willis 20 September, 2021 | 4:28AM
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Andrew Willis: For those stuck at home in the suburbs over the pandemic, you may have heard – and felt - Harley-Davidsons more often. Does that mean there’s increased demand for these hogs? Is there an investment opportunity here?

Not so much. Rather, the post-pandemic world may see the ‘road rebel’ customer base getting old and the Harley brand facing changing consumer preferences.

According to senior equity analyst Jaime Katz, the company’s products are now predominantly concentrated around an over-35 demographic, with an increasing proportion moving into retirement age. And while the company is making efforts to reach out to other demographics, we expect there will be more attrition than adoption.

Last year, Harley (HOG) ceded massive market share at nearly 8% - now holding less than half the market. And while this was from stores closing and factories shutting down, we’ll need to monitor the situation post-COVID before we can say the company’s wide competitive moat stays intact.

But like a V-Rod with an open throttle, Harley’s not standing still. The company’s positioning itself for long-term improvement with the “Hardwire” strategy, moving into the middleweight category bike to offset sales declines in its larger legacy products – and offering a quieter electric bike that still looks and sounds pretty cool.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Harley-Davidson Inc46.86 USD1.87Rating

About Author

Andrew Willis

Andrew Willis  is Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.


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