HOG
Harley-Davidson, Inc.
$26.76
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 32.8% below fair value
You pay
$26.76
Bear
$29.33
Fair
$39.81
Bull
$50.28
Bear
$29.33
+9.6%
$4.19 × 7x
Fair
$39.81
+48.7%
$4.19 × 10x
Bull
$50.28
+87.9%
$4.19 × 12x
Adjust Assumptions
9.5x
4.19$
Key Value Driver
Through-cycle normalized EPS ($4.19)
Implied Market Multiple
6.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$28.50
Divergence from AlphaVal
40%
Summary
Using 7-year normalized EPS of $4.19 at a 10x cycle multiple, the base-case value is $39.81 per share. P/TBV cross-check: 0.9x.
Warnings
Wall Street's average price target is $28.50 (from 36 analysts). Our estimate is 40% above the consensus -- consider that gap carefully.
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