Harley-Davidson HOG has announced a cash dividend of 18 cents per share for the first quarter of 2025, representing a 4.3% increase from the prior dividend of roughly 17 cents per share. The dividend, representing a forward yield of 2.8%, is payable on March 14, 2025, to its shareholders of record of the company’s common stock as of Feb. 28, 2025.

This dividend hike highlights HOG’s financial strength and commitment to returning value to its shareholders. The increased payout is likely to boost investor confidence and improve the stock’s performance.

However, Harley-Davidson shares have dipped 30.7% in the trailing 12-month period, underperforming the Zacks Auto-Tires-Trucks sector’s appreciation of 11.3% and the Zacks Automotive – Domestic industry’s return of 25.9%. The S&P 500 index has surged 23.2% in the same time frame.

The company’s shares have also underperformed industry peers like General Motors GM, Blue Bird BLBD and Rivian Automotive RIVN.

While GM and BLBD shares have gained 20.6% and 14%, respectively, RIVN shares have lost 23.7% in the trailing 12-month period.

Harley-Davidson shares have been suffering from lower sales volumes across regions, falling profit margins, and thus, a weak outlook for 2025.

One Year Performance

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In such a scenario, should investors hold or fold the HOG stock? Let us dig deep to find out.

HOG’s Growth Fueled by Innovation & Expansion

Harley-Davidson is strengthening its market position with an expanding and innovative product portfolio. The successful launch of the ‘24 Street Glide and Road Glide models drove nearly 5% growth in the United States. The Touring segment in 2024, pushing HOG’s market share to nearly 75% — its highest since 2019.

The company has introduced six new cruisers alongside updates to the Sportster S and Pan America 1250 ST adventure motorcycle. These advancements are enhancing HOG’s competitive edge and appeal to a broader rider base.

HOG’s brand expansion and strategic marketing efforts are further fueling its growth. Collaborations with Champion and custom-built apparel lines are boosting brand visibility and consumer engagement. These efforts have been successful, with HOG securing major victories in the Africa Eco Race and Super Hooligan Championship.

Furthermore, the company’s LiveWire unit, focused on e-bikes, is bolstering the company's presence in a dynamic sportier market with its innovative offerings, with two models, LiveWire One and Del Mar. Its global retail sales surged 46% year over year in 2024, maintaining a 65% market share in the U.S. 50+ horsepower road EV segment, solidifying Harley’s leadership in electric motorcycles.

HOG Shares Undervalued

HOG shares are currently undervalued, as suggested by the Value Score of A. In terms of the forward 12-month price/sales, the stock is trading at 0.79x, lower than the broader sector’s 1.48x.

Price/Sales Ratio (F12M)

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Harley-Davidson’s Dull 2025 Outlook

HOG expects 2025 retail sales to be flat, with better performance in the second half of the year. Wholesale shipments are expected to be down 5% as the company manages dealer inventory. Global inventory levels are expected to drop by over 10% by the end of 2025, with a sharp 30% reduction in the first half of the year.

Revenues for Harley-Davidson Motor Company (HDMC) are expected to be flat to down 5%. Harley-Davidson Financial Services (HDFS) anticipates a 10% to 15% drop in operating income due to higher borrowing costs and lower lending activity. Lower sales volume, foreign currency fluctuations and an unfavorable product mix shift are likely to impact margins.

The company expects EPS to be flat to down 5% in 2024, influenced by higher taxes, lower interest income and reduced pension gains.

Capital investments are expected to be between $225 million and $250 million in 2025.

What Do HOG Estimates Say?

The Zacks Consensus Estimate for Harley-Davidson’s full-year 2025 revenues is pegged at $4.14 billion, indicating a decline of 0.14% year over year. The consensus mark for 2025 EPS is currently pegged at $3.44, down 18.1% over the past 30 days, indicating flat year-over-year growth.

HOG beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 1.11%.

HOG Stock: Buy, Sell or Hold?

Despite Harley-Davidson’s strong innovation and expansion, the company’s weak guidance for 2025 and declining earnings estimates suggest that the stock needs to be approached with caution.

HOG currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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