Harley-Davidson Analyst Confident CEO Will Spark Company's Cash Flow, Believes Stock Is 'Too Inexpensive'

Shares of Harley-Davidson Inc HOG were trading higher on Tuesday as an analyst upgraded the stock.

After the recent sell-off, the stock is “too inexpensive,” for a company that generates 3% top-line growth with a 12% free cash flow yield, according to Morgan Stanley.

The Harley-Davidson Analyst: Adam Jonas upgraded the rating for Harley-Davidson from Equal-Weight to Overweight, while maintaining the price target at $50.

The Harley-Davidson Thesis: The meeting with management has increased the confidence in CEO Jochen Zeitz's focus on “generating cash flow from the core motorcycle business while prudently managing the risks of the LVWR business,” Jonas said in the upgrade note.

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The share price already reflects the negative outlook, while Harley-Davidson’s average customer “is stronger than the average auto consumer,” the analyst stated.

“We are increasingly bullish on companies focused on cash generation and capital allocation over unprofitable and unproven EV projects,” he added.

HOG Price Action: Shares of Harley-Davidson had risen by 5.8% to $39.70 on Tuesday at the time of publication.

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