Harley-Davidson Tops Watchlists: Value Trap or Turnaround Play?

Key Points

• Despite its recent stock performance, Harley-Davidson's valuation metrics suggest potential opportunities for investors seeking value in the current market.
• The enduring strength of the Harley-Davidson brand, combined with recent successes in core product segments, fuels hope for the future.
• Increased watchlist activity indicates significant market attention, driven by views that look beyond current challenges to the company's potential.

Harley-Davidson, Inc. NYSE: HOG is experiencing a surge of attention from investors, even as it faces significant challenges. Despite grappling with operational difficulties and a declining stock price, the company has unexpectedly risen to the top of several watchlists.

This heightened interest comes as Harley-Davidson’s shares trade near their 52-week lows. This is due to disappointing financial performance, cautious forecasts, looming tariff uncertainties, and an upcoming CEO transition.

This paradoxical situation prompts a crucial question: What is driving investor interest in Harley-Davidson despite these substantial headwinds?

Choppy Roads: HOG Confronts Key Challenges

Harley-Davidson's recent surge in market popularity presents an opportunity for the company to address operational challenges, such as CEO Jochen Zeitz's upcoming retirement and ongoing financial difficulties.

Harley-Davidson’s financial results for the fourth quarter and the full year of 2024 were disappointing, with a net loss in Q4, declines in revenue, and lower earnings-per-share (EPS) for the full year when compared to 2023. However, many in Harley-Davidson’s analyst community have stated that these results reflect ongoing sector challenges, including cyclical headwinds, high interest rates impacting consumer confidence, and efforts to manage dealer inventory during a time of softer demand. 

Harley-Davidson is also facing continued market pressure and external uncertainty, especially regarding potential European Union tariffs on motorcycles imported from the U.S. The company's cautious financial outlook for 2025 reflects these ongoing challenges. If reinstated, these tariffs could impact Harley-Davidson's pricing and competitiveness in crucial European markets. The company is actively advocating for reciprocal U.S. tariffs should new EU duties be imposed.

Harley-Davidson’s Negative Sentiment Creates a Contrarian Opportunity

Despite numerous challenges, Harley-Davidson’s growing presence on investor watchlists suggests that some market segments see opportunity—or at least enough potential to warrant close attention.

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One clear attraction is valuation. As of early April 2025, the stock was trading near multi-year lows, with a trailing price-to-earnings (P/E) ratio of about 6.8 and a forward P/E of 6.6. Its price-to-book (P/B) ratio stood at roughly 0.92, below 1.0. For value investors, these metrics suggest that significant pessimism is already priced in, making Harley-Davidson potentially undervalued relative to its historical earnings power and underlying assets.

Beyond the numbers, the enduring strength of the Harley-Davidson brand remains a major factor. Founded in 1903, the company’s rich history and famously loyal customer base offer a foundation some investors believe can outlast the current cyclical downturn and leadership transition. Recent operational highlights lend some support to this view: during the Q4 2024 earnings call, management noted that new Street Glide and Road Glide models helped drive U.S. Touring segment market share gains, a bright spot amid broader weakness.

This modest success hints that Harley’s Hardwire strategy may still bear fruit under new leadership. In the meantime, deep negative sentiment and sharp price declines have positioned Harley-Davidson as a potential contrarian play—a fundamentally sound brand trading at beaten-down levels that may appeal to investors willing to bet against the crowd.

Increased Visibility Keeps Harley-Davidson on Investor Watchlists

Significant short interest is also fueling investor attention. As of mid-March 2025, approximately 14.37 million shares were sold short, representing 11.63% of Harley-Davidson’s publicly available float. Covering these positions would require roughly 6.1 days of average trading volume. While this reflects a strong bearish sentiment, it also introduces the potential for heightened volatility if positive news triggers short covering.

Institutional ownership remains high at about 85%, providing additional context. Recent filings show that while some funds have slightly reduced their holdings, others are initiating substantial new positions or adding to existing ones.

Management’s decision to repurchase $450 million of shares in 2024 under a $1 billion authorization may signal confidence in the company’s valuation or could serve as technical price support during a volatile period.

At the same time, increased media coverage around the CEO transition, strategic initiatives, and tariff discussions has kept Harley-Davidson visible on investor watchlists, with many monitoring for an opportune entry point.

Balancing Harley's Legacy, Value, and Volatility

Harley-Davidson's current situation presents a compelling contrast: significant investor interest despite operational challenges. Investors are attracted to the stock's low valuation, the brand's strength and legacy, recent successes in the U.S. Touring segment, and the contrarian appeal despite widespread pessimism.

The company's future hinges on several key factors. The ongoing CEO search offers an opportunity for new leadership to leverage the Hardwire strategy and brand strength. Proactive engagement on European tariff issues demonstrates a focus on mitigating external risks. The company's proven execution within core segments and disciplined operational management position it to potentially outperform expectations if market conditions improve.

The key question for investors is whether Harley-Davidson's current valuation offers an attractive entry point for future gains, should the company successfully navigate these transitions and capitalize on its iconic brand.