HOG
Harley-Davidson, Inc.
$25.39
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 6.7% above fair value
You pay
$25.39
Bear
$17.40
Fair
$23.79
Bull
$30.17
Bear
$17.40
-31.5%
$4.19 × 4x + net cash
Fair
$23.79
-6.3%
$4.19 × 6x + net cash
Bull
$30.17
+18.8%
$4.19 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.19)
Implied Market Multiple
6.1x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $24.67 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $23.79 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