Harley-Davidson Misses Estimates, Falls Hard

American icon Harley-Davidson (HOG) reported a larger loss than analysts expected when it released its Q4 financial data Friday morning. The motorcycle manufacturer reported a loss of $218 million, or $0.94 / share, coming in significantly lower than the consensus estimate of a $0.27 / share loss. Shares fell hard on the news, closing the day at $23.59 for a loss of almost 8%.

These were the first quarterly losses experienced by the company since 1993. Still, an optimistic CEO Keith Wandell expressed his belief that the current weakness is self-inflicted, due to massive corporate restructuring, and that it is “worth the longer-term gain” that the company expects to see. These feelings were echoed by an analyst at Wells Fargo, who recommended aggressive buying into any weakness.

HOG’s chart is not particularly favorable right now. Shares had hung around just below their 50-day moving average for almost two months, but took a solid nose-dive on heavy volume on Friday. Currently situated at $23.59, shares won’t hit any solid support until around $20 – $21, HOG’s 6-month lows. I would recommend allowing some time to see if shares do indeed test support to make sure it holds. If it can rebound off that level, or retake its 50-day moving average in the event that it does not test support, you can start to think about opening up a partial position. Until then, stay on the sidelines.

Disclosure: No positions in HOG.

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