Can Harley-Davidson's Shares Climb in Light of Its Forthcoming Earnings Report?
In the motorcycle industry, the correlation between a company's short-term and medium-term returns post-earnings can provide valuable insights for traders. This is particularly true for Harley-Davidson (NYSE:HOG), whose stock performance after earnings announcements has proven to be influenced not only by raw financial results but also by accompanying strategic developments.
On July 30, 2025, Harley-Davidson reported a second-quarter earnings miss with EPS of $0.88 vs. an expected $0.96 and a 50.7% net income drop from a year prior, along with significant declines in motorcycle sales and shipments (down about 27-28%). Yet, the stock surged sharply by around 15.7% to 20% on the day of and immediately after the earnings release due to investor enthusiasm over a strategic deal selling a 4.9% stake in Harley-Davidson Financial Services to KKR and Pimco, which promised $5 billion in loan sales and enabled a $1 billion share buyback and debt reduction.
This example highlights how significant non-operational news can be in influencing post-earnings stock action. While earnings misses and falling sales have historically weighed on the stock, major financial or operational moves such as asset-finance deals or buybacks have triggered strong positive stock rallies.
Historically, Harley-Davidson’s stock has often moved positively in the days following earnings announcements when there is offsetting good news despite earnings misses. This pattern indicates investors react positively to growth-enabling or balance sheet-improving initiatives even when core sales and earnings disappoint.
Here's a summary of the key drivers of Harley-Davidson's stock reaction following earnings:
| Earnings Result | Stock Reaction | Key Drivers | |-----------------|----------------|-------------| | Earnings miss, declining sales | Stock typically pressured | Weak demand, lower shipments | | Earnings miss + strategic financial deal (e.g., stake sale, buybacks) | Large positive stock jump (15-20%) | Improved financial flexibility, share buybacks, debt reduction |
In the broader context, Harley-Davidson achieved operational profitability, generating $314 million in operating profits and $354 million in net income. Revenue for Q2 2025 is expected to reach around $1.1 billion, representing a nearly 19% decrease year-over-year. The company has retracted its full-year 2025 outlook due to uncertainties related to trade policies and macroeconomic fluctuations. Consensus forecasts suggest earnings of approximately $0.96 per share for Q2 2025, a decline from $1.63 in the same quarter last year.
Historical data showcases the post-earnings performance of Harley-Davidson stock in comparison to the stock performance of peers who reported earnings just before Harley-Davidson. Over the past five years, Harley-Davidson has had 17 earnings data points, with 11 positive and 6 negative one-day returns, resulting in a 65% positive return rate. The median of the 11 positive returns is 7.8%, and the median of the 6 negative returns is -6.8%.
When analyzing data from the last 3 years, the positive return rate drops to 64%. This suggests that while Harley-Davidson's stock has historically shown a positive trend post-earnings, this trend may not be as consistent in the recent past.
The High Quality portfolio has surpassed the S&P and achieved returns exceeding 91% since inception. Trefis RV strategy has outperformed its all-cap stocks benchmark to deliver considerable returns for investors. However, it's essential to note that peer stock returns can also influence the stock's reaction following earnings.
As Harley-Davidson (NYSE:HOG) prepares to announce Q2 2025 earnings on July 30, 2025, investors should keep an eye on both the financial results and any strategic moves that may be announced alongside them. A less risky strategy is to determine the correlation between short-term and medium-term returns post-earnings and target the pair with the strongest correlation to execute the necessary trade.
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- The upcoming Q2 2025 earnings announcement for Harley-Davidson (NYSE:HOG) will be crucial, as the stock's post-earnings performance is often influenced not only by financial results but also by strategic developments.
- Given the historical pattern, investors might expect a positive reaction in Harley-Davidson's stock even with an earnings miss, particularly if the company announces strategies like asset-finance deals, buybacks, or debt reduction that enhance financial flexibility.
