HOG
Harley-Davidson, Inc.
$23.73
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 1.7% above fair value
You pay
$23.73
Bear
$17.07
Fair
$23.34
Bull
$29.60
Bear
$17.07
-28.1%
$4.19 × 4x + net cash
Fair
$23.34
-1.7%
$4.19 × 6x + net cash
Bull
$29.60
+24.7%
$4.19 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.19)
Implied Market Multiple
5.7x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $23.17 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $23.34 per share.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing