Bear of the Day: Harley-Davidson (HOG)

Despite its status as a global icon, Harley-Davidson faces a steep uphill climb as it navigates a perfect storm of economic and demographic headwinds.

Harley-Davidson Company Overview

Zacks Rank #5 (Strong Sell) company Harley-Davidson Inc. (HOG) is one of the leading motorcycle manufacturers in the world. The Milwaukee, WI-based-Harley Davidson has reportable segments, including Harley Davidson Motor Company (HDMC), Harley Davidson Financial Services (HDFS), and LiveWire. HDMC accounts for more than ¾ quarters of the company’s revenues and includes the design, manufacturing, marketing, and sales of the iconic Harley-Davidson motorcycles and related products. The HDFS segment accounts for nearly 20% of revenues and provides financing, servicing, and retail consumer loans for its Harley Davidson motorcycles. Finally, the LiveWire unit includes marketing and sales of HOG’s electric motorcycles and bicycle products and accounts for less than 1% of total revenues.

Tariffs Pressure Harley Davidson Margins

The Trump Administration’s tariff policy is negatively impacting Harley-Davidson’s margins. Although Harley-Davidson is an American company, it sources its parts from Asia, Europe, and Latin America. HDMC’s gross margin fell to 24.2% in 2025 from 28% in 2024, with tariffs costing $67 million in 2025. In 2026, the company estimates $75-$105 million in new or higher tariff costs, based on current rates relative to the 2024 baseline.

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Affordability & Macro Environment

Lofty interest rates, weak consumer confidence, higher oil prices, and inflationary concerns are weighing on Harley-Davidson demand. Zacks Consensus Estimates suggest that HOG’s earnings-per-share will plunge nearly 60% in 2026 as revenue growth is expected to be stagnant for the foreseeable future.

Image Source: Zacks Investment Research

Consumer Preferences are Changing

Baby boomers comprise the vast majority of Harley-Davidson buyers. However, baby boomers are quickly aging out of the motorcycle market. Meanwhile, the company is struggling to capture the Millennial and Gen X $TWTR markets, which prefer Harley-Davidson’s European and Japanese competition.

HOG: Relative Weakness

Over the past three years, HOG shares have lost nearly 40% of their value while the S&P 500 Index has gained 72%. Not only does this exhibit relative weakness, but it also shows that there is a very high opportunity cost in owning lagging HOG shares.

Image Source: Zacks Investment Research

Despite its status as a global icon, Harley-Davidson faces a steep uphill climb as it navigates a perfect storm of economic and demographic headwinds. Between the tightening grip of international trade tariffs and a shrinking customer base, the company’s traditional business model is under significant duress.

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