Harley-Davidson's 'Rewire' Plan Turns Argus Bullish

Harley-Davidson Inc’s (NYSE: HOG) new strategic plan, recently announced by interim CEO Jochen Zeitz and called “The Rewire,” could result in a strong recovery as the economy restarts, according to Argus.

The Harley Analyst

David Coleman upgraded Harley-Davidson from Hold to Buy with a $30 price target. 

The Harley Thesis

Harley-Davidson plans to launch 100 new motorcycle models over the next decade to attract new riders and has also initiated production of smaller 500-750 cubic centimeter motorcycles, Coleman said in the Monday upgrade note. (See his track record here.)

The Milwaukee manufacturer is taking several initiatives to mitigate the pandemic impact on its business, including salary cuts, hiring freezes and adjustments in its new product launch schedule, the analyst said.

Harley-Davidson has also announced dividend cuts and suspended any share repurchases for now, he said.

The stock has lost more than 40% over the last quarter and is trading close to the low end of its 52-week range, Coleman said. 

“We believe that the pullback provides risk-tolerant investors with a favorable entry point.”

HOG Price Action

Harley-Davidson shares were up 4.53% to $21.23 at the time of publication Tuesday.

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