The attacks by Indian Motorcycle on Harley-Davidson Motor Company have generated a buzz, but not on Wall Street.
Harley’s stock price has increased since Indian, in late May, launched a campaign criticizing the Milwaukee-based motorcycle maker’s executive hires and previous policies on diversity, equity and inclusion.
Harley’s stock is up roughly 10% in the last month to about $25.70 per share.
Investors aren’t paying attention to the social commentary and are instead waiting to see if Harley-Davidson’s strategy of more offering affordable bikes will work, said Jaime Katz, who monitors Harley-Davidson for Morningstar, said .
“It’s a ‘show me story’ stock now. We have to see how this new plan being implemented plays out,” Katz said. “It’s hard to have confidence when there have been so many different attempts to stimulate demand and it hasn’t come to fruition.”
Later this year, Harley plans to relaunch the Sprint model which starts at about $6,000, and will bring back the Sportster in 2027 which is expected to sell for about $10,000.
Harley is leaning into lower priced cycles in response to changing economic conditions.
“When you have a price sensitive consumer, they don’t care that it’s a Harley. It’s just not as important. They’re shopping by price point; they’re not by brand to the same degree,” Katz said. “To some level it’s relevant but the price is ultimately the deciding factor in what unit they’re going to purchase.”
Harley-Davidson is also trying to tap into some nostalgia.
This year to commemorate America’s 250th anniversary, Harley brought back a limited edition of the red, white and blue Super Glide model from 1971. The company is planning to build only 2,500 of that model, selling them around $15,000.
“In my opinion, it’s a volume story now,” Katz said. “(Harley-Davidson needs) to start growing unit sales in a way that is significant enough you can lever your expenses in a more meaningful way than you have been doing.”
Having more affordable bikes isn’t a new idea. It’s one previous Harley CEOs have tried in the past with mixed results.
More affordable bikes theoretically means Harley might sell more units but the profit on each is lower. The company has also previously focused on its larger more expensive bikes that bring more profit per unit but don’t sell as many units.
A key part of Harley’s strategy is its focus on dealership health.
“That is the person who is going to facilitate unit sales in the most optimal way possible,” Katz said. “They’re starting where they need to start and getting their constituents on board with them. And a big piece of that is making sure the dealers are happy.”
The health of the economy is uncertain. No company is sure of what, if any, impacts tariffs will have on their business long-term. And there could be other unforeseen headwinds that impact Harley-Davidson sales.
“We have a higher inflation environment for internal combustion engines; you have higher gas prices for your motorcycle; you have consumer sentiment that’s still declining; you have a stalled employment picture; you have services still outperforming goods; you have lower consumer savings,” Katz said.
“How do we get people to buy a bike with the macro picture on top of it as a headwind?”
This article originally appeared on Milwaukee Journal Sentinel: Harley stock price climbs despite Indian Motorcycle’s anti-DEI attacks
Reporting by Ricardo Torres, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
USA TODAY Network via Reuters Connect
By Ricardo Torres, Milwaukee Journal Sentinel | USA TODAY Network
