Due to Strong Dollar and Slow Sales, Harley’s Stock Could Take a Hit: Barron’s

Harley-Davidson Inc. shares have been on the rise for most of the recent twelve months. Now it is a possibility that HOG.N or Harley-Davidson Inc. sees a decline in their shares because of the sales that are slowing now. This was according to the cover story that was published on Barron’s, which was published on 27th February 2017.

William S. Harley and Arthur Davidson were the founders of this motorcycle maker. In the early 1900s, they made the first production model available to the public. The logo of Harley-Davidson Motorcycles was trademarked in 1911. In the 1930s, they designed most of their classic motorcycle designs that we can see today. The company started to grow as they purchased a half interest in Aeronatica-Macchi.

This formed a European division for the company titled Aermacchi Harley-Davidson, which will produce small, single-cylinder motorcycles. In the 1970s, Harley-Davidson introduced the FX 1200 Super Glide in response to the customizing craze. In 1980s, the Harley-Davidson senior executives had a buyback for their company and the phrase “The Eagle Soars Alone” became a rallying cry.

In the 1990s, their product development center was established next to their Capitol Drive plant in Milwaukee. The years in the 2000s were engine innovation years with the fuel injected twin cam 88b engine. New models kept on coming and the company was globally recognized as one of the premier motorcycle makers in the world.

Although the company has a good customer base internationally, according to the article published in Barron’s, it can be duly noted that this famed motorcycle maker’s base of customers of the middle aged Americans is constantly shrinking. The strong currency i.e. US Dollar due to the Trump administration would hurt the profitability of the motorcycle maker’s international sales.

According to Barron’s, the stock should be trading in the low 40s in terms of dollars. This is down from the stock price of $56, which was when the market closed on Friday.

The story states that with so many challenges, secularly it is really hard to get why the shares of Harley Davidson are cruising near the high end of the valuation range of the company.

Matt Levatich, the Chief Executive Officer of Harley Davidson knows that the motorcycle maker cannot just make motorcycles. The company needs to create demand for their product as well.

The main goal, according to what he told Barron’s, is the building of the next generation Harley riders across the globe.

The company is at least 114 years old and we don’t look at a short term goal, said Levatich.

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