The tariff tantrum the stock market has sent many sectors reeling. These actions, meant to stand up for the American consumer, have led to a ton of downside volatility. Eventually though, it is supposed to be for the better, with American companies benefiting.

Well, Harley-Davidson (HOG) is about as American as it gets. With its iconic rumble and chrome-laden legacy, it’s the kind of stock retail investors love to root for. But just because a brand tugs on our nostalgia strings doesn’t mean it's a great place to park your money, especially when the fundamentals start to crack. And right now, HOG is riding through some serious headwinds, which is why I’m naming it my Bear of the Day.

Let’s start with the demand picture. The motorcycle industry is facing a demographic cliff, with its core audience aging out and younger consumers far less interested in expensive hogs. Harley's LiveWire EV project, while ambitious, hasn’t generated the buzz or revenue to offset the decline in traditional bike sales. The last earnings report reflected this softness, with revenue missing expectations and international sales dragging even harder. Add in tightening consumer credit and macro uncertainty, and it’s no wonder analysts are slashing estimates.

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Which brings us to the Zacks Rank. Harley-Davidson currently sits at a Zacks Rank #5 (Strong Sell), and that’s not by accident. Over the past 60 days, we’ve seen multiple downward revisions to EPS estimates for both this quarter and the full year. That’s a bearish signal we can’t ignore. Analysts now expect negative earnings growth for the full year, a stark reversal from earlier optimism fueled by pandemic-era demand spikes. Current year Zacks Consensus Estimates are down from $4.20 to $3.24, a contraction of 5.81% on a sales contraction of 1.99%.

The Automotive – Domestic industry sits in the Bottom18% of our Zacks Industry Rank. There are a couple of names within this industry which are in the good graces of our Zacks Rank. These include Xos (XOS) and Zapp Electric Vehicles (ZAPP).

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Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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