Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
Stock Report
August 12, 2005
NYSE Listed: HDI
Analyst Information
S&P 500 Weight: Approximately 0.13%
Sector: Consumer Discretionary
Sub-Industry: Recreational Vehicles
Peer Group: Motorcycles
Name: Joshua P. Siler
Email: siler.24@osu.edu
Phone: (614) 921-8434
Course: MBA 824
Employees
9580
(In Millions)
Market Cap
Shares Outstanding
Return
Risk
High
Low
15,294.96
274.4
3700 West Juneau Avenue
Milwaukee
WI 53208
United States
http://www.harley-davidson.com
Valuation Ratios
Price/Earnings (TTM)
Price/Sales (TTM)
Price/Book (MRQ)
Price/Cash Flow (TTM)
17.35
2.9
5.72
14.01
Profitability Ratios
Gross Margin (TTM)
Operating Margin (TTM)
Net Profit Margin (TTM)
35.3
25.48
16.69
Financial Strength
Quick Ratio (MRQ)
Current Ratio (MRQ)
LT Debt/Equity (MRQ)
Total Debt/Equity (MRQ)
3.02
3.53
0.3
0.31
Highlights
A somewhat negative report issued by the company in April, led to the
decrease in share price by 17% in one day of trading. This price adjustment
was overdone and has created a unique buying opportunity for investors.
The company has introduced six new models for the 2006 model year. In
addition, the company has released a limited addition 35th anniversary SuperGlide model. The new motorcycles and special anniversary release should
create excitement for the brand and draw new customers into showrooms.
Harley-Davidson’s domestic market share is 50% and rising.
The company is starting to target a much overlooked market in this industry:
women. Look for new models and design features catered toward this growing
market segment.
The stock price valuations indicate a good value, coupled with year over year
high ROE and growth rates in addition to a clean balance sheet and strong cash
flows. Money should be drawn back towards the stock, lifting the stock price
back to pre-April levels.
Per Share Data
Earnings (TTM)
Sales (TTM)
Book Value (MRQ)
Cash Flow (TTM)
Cash (MRQ)
3.1
18.54
9.39
3.83
5.48
Management Effectiveness
Return on Equity (TTM)
Return on Assets (TTM)
Return on Investment (TTM)
29.77
18.26
22.25
Dividend Information
Dividend Yield (%)
Dividend per Share (MRQ)
Payout Ratio (MRQ)
0.75
0.16
18.91
(TTM) – Trailing Twelve Months
(MRQ) – Most Recent Quarter
-All Figures from Reuters Fundamentals
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Table of Contents
Business Overview
Economic Overview
Federal Funds Rate
Oil
Consumer Confidence
Unemployment
Disposable Income
Summary
Economic Factor Regression
Revenues
Stock Price
Sector Overview
Industry Analysis
Company Analysis
New Products
Demographics
Company Management
Risks
Regulatory and Environmental
Recalls and Lawsuits
Competition
Brand Image Loss
Financials
Income Statement
Balance Sheet
Cash Flows
Return on Equity
Valuation
Technical Analysis
Recommendation
Acknowledgements
References
Exhibits
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page
3
4
4
5
5
6
6
7
7
7
8
9
12
12
13
13
14
14
14
15
15
15
16
16
17
18
21
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26
26
27
28
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Page 2
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Business Overview1
Harley-Davidson engages in the design, manufacturing, distribution and sales of premium
motorcycles for the heavyweight motorcycle (+651 cc) market. In addition to the company’s
well-known Harley-Davidson brand, it also offers a line of performance driven motorcycles
under the Buell brand name. Overall, approximately 80% of the company’s 2004 net revenues
were derived from worldwide motorcycle sales.
The company’s products rely on traditional styling, quality and ownership pride. For 2005, the
company had 32 models of Harley-Davidson touring and custom motorcycles with a retail price
from $6,495 to $20,405. The models fall under one of five families; Sportster, Dyna Glide,
Softtail, Touring and VRSC. In addition to this model line, the company also offers limited
edition custom motorcycles. These motorcycles are produced in limited quantities and have
unique features, colors and accessories to create a one of a kind motorcycle which is highly
desired in the market. The retail prices for these special edition motorcycles range from $24,495
to $29,995.
The Buell brand offers an overall performance package at relatively lower prices than the
Harley-Davidson brand. Buell currently offers 6 models in two families; XB and Blast. The XB
family focuses on handling and performance and has a retail price range of $8,695 to $10,495.
The Blast is smaller, less powerful and less expensive with a retail price of $4,595.
Harley-Davidson Financing Services (HDFS) operates under the trade name of Harley-Davidson
Credit and provides financial services to dealerships and retail financing to customers. Under the
trade name Harley-Davidson Insurance, the company provides a wide variety of Insurance
policies and extended warranties to customers. These services often offer competitive rates for
customers rivaling those that could be found at a bank, credit union or outside insurance
company.
In addition to motorcycles, Harley-Davidson also sells parts and accessories for existing
motorcycle repair and customization. Through its Genuine Motor Parts and Genuine Motor
Accessories divisions, the company received approximately 15.4% of its 2004 worldwide net
revenue. Harley-Davidson also offers merchandise which includes apparel, collectible toys,
memorabilia and other items. This arm of the company provided 4.5% of the 2004 net revenues.
A small amount of revenue is generated from the licensing of the Harley-Davidson logo and
brand on various items such as t-shirts, jewelry, leather products, safety glasses and even a
restaurant located in Las Vegas. The revenue from this business is small, approximately $41
million in 2004, but growing as the company expands its brand name recognition internationally.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 3
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
The firm has a number of advantages over its competition. First and foremost is the highly
storied and immediately recognizable brand name and image. The company has been in
existence for over 100 years and has a legacy built into its brand that will be difficult for any
competitor to overcome. The business has a very loyal customer base and typically 90% of
Harley-Davidson motorcycles owners have indicated intent to purchase another Harley
motorcycle. Customers seem to have an almost cult-like following and the company sponsors
large charity events and biker rallies throughout the country. Harley-Davidson created and
trademarked the Harley Owners Group (H.O.G.) as a platform for Harley riders to interact and
share a passion for the brand2. With over 900,000 members, H.O.G. is one of the most
recognizable customer loyalty programs in the industry.
Harley-Davidson is also very careful with its production output to keep the motorcycle demand
ahead of supply. Currently, the waitlist for a new motorcycle is approximately one year. This
allows the prices and margins to remain high along with the excitement and anticipation that
comes along with Harley ownership. Currently, Harley-Davidson has a 50% market share.
The ability to offer a one-stop package for low interest retail financial and insurance services
through its HDFS arm is a significant competitive advantage for Harley-Davidson.
Finally, the company has a number of active patents (477) which are protected by the US Patent
Office. Some of these patents give the manufacturer certain design features and characteristics
that are favorable to consumers or which offset manufacturing costs. Either way, the patents
provide Harley-Davidson with a sustainable competitive advantage of patented design features
for the duration of the patents, typically 20 years.
Economic Overview
Federal Funds Rate
The Federal Reserve Board has been steadily raising
the Federal Funds rate by 0.25% for the past 10
sessions since mid 2004. The Feds objective is to
dampen inflation worries caused by healthy increases
in the GDP. Although high inflation may be a
necessary by-product of healthy economic growth,
the end result of interest rate increases is a slowing
economy. In this economic environment which is
highlighted by a jobless recovery and record high oil
process, curbing the growth by stifling the ease of
financing could cut off the fertilizer necessary to
sustain this half-hearted recovery.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Figure 1 – Federal Funds Rate
Page 4
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
For Harley-Davidson, however, a higher Funds Rate may not have as much of an effect as seen
at other companies because Harley has at its disposal an in-house financing arm through HDFS.
Financing in this manner by-passes the market rates and allows Harley to offer low interest
financing to prospective customers.
Oil
Oil affects almost every industry through higher
energy costs to produce goods and higher fuel costs
to deliver goods to customers. The record high
cost of oil will certainly provide some resistance to
the growth seen lately in the economy. The
evidence that this economy can handle $70 per
barrel oil is debatable and only time will tell if the
recent oil spikes predicate a new recession.
Harley-Davidson might feel the pinch as suppliers
of necessary key raw materials and parts require
Figure 2 – Spot Oil Price
price increases to offset the cost of higher energy
bills and transportation surcharges. HarleyDavidson’s factories themselves will have to assume a higher manufacturing cost at its facilities.
Ultimately these costs are rolled down to the consumer whom may resist such price increases.
Consumer Confidence3
The Consumer Conference Board issues a monthly Consumer
Confidence Index based on a survey of 5,000 households. The
outlook for the labor market was mixed. People anticipating
additional jobs to become available in the upcoming months
edged up from 15.4 percent to 15.8%, while those expecting
fewer jobs rose to 16.8 percent from a June figure of 16.4 percent.
Those surveyed who are anticipating their incomes increasing in
the months ahead fell to 18.6 percent from 19.9 percent recorded
in June.
Figure 3 – Consumer Confidence
The overall assessment of market conditions was mixed in July.
Those claiming business conditions are “bad” increased to 16.9
percent from 15.3 percent. However, those claiming conditions are “good” improved to 28.7
percent from 26.7 percent. The employment picture was also mixed. Consumers saying jobs are
“hard to get” increased to 23.8 percent from 22.5 percent, but those claiming jobs are “plentiful”
held steady at 22.5 percent.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 5
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Consumer Confidence data is important because it is a reliable gauge to the likelihood of
increases or decreases in household spending. Companies in the Consumer Discretionary Sector
are very much affected by the ebb and flow of consumer psychology. When consumers are more
confident in their own personal lives and have comfort with employment and income situations,
they are more likely to purchase more luxury items and take more vacations. The current
numbers suggest that consumer confidence is healthy but underlying uneasiness about the future
could prevent a full fledged economic boom. Harley-Davidson customers satisfied with their
jobs and career prospects may “celebrate” their personal situation with the purchase of a new
motorcycle.
Unemployment
®
StockVal
The latest US Department of Labor data
shows the current unemployment rate is
5.0%. The overall trend is a decrease in
unemployment steadily from the mid2003 high of 6.3% nationwide. Although
this number is a national average with
some pockets of the country having
higher unemployment rates, this can
certainly be seen as a positive indication
of a strengthening economy. This should
provide growth for industries which rely
on household spending to maintain
growth. Currently, the unemployment
rate is in a period of steady decline as
jobs are created. This job creation
Figure 4 – Unemployment Data
process has been slow due to outsourcing
and low consumer demand for domestic
goods, so we might expect unemployment to remain between 4% and 5% for quite some time.
1995
6.4
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
6.2
6.0
5.8
5.6
5.4
HI
LO
ME
CU
5.2
5.0
6.30
3.80
5.20
5.00
4.8
4.6
4.4
4.2
4.0
3.8
08-31-1995
07-31-2005
3.6
UNEMPLOYMENT RATE,SA %
Disposable Income
Figure 5 – Disposable Income
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Disposable Income, as measured by the US
Department of Commerce, has shown a steady
increase in household disposable income over the
last five years. As the name implies, this
represents money available to households after all
necessary taxes have been paid out. Of course,
this figure does not include non discretionary
expenses such as housing, food, transportation,
heating and child care. But nonetheless, the figure
has been rising which indicates a rise in income
amongst wage earning individuals.
Page 6
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Summary
Outside of rising interest rates and oil prices, the economy is growing at a healthy rate and this
trend should continue into the near term future provided oil prices stay below $70 per barrel and
the Fed soon puts a halt on the Fund rate increases. Job growth remains tepid but productivity
gains are strong. In addition, the weak dollar should boost exports and thus stimulate growth
with the domestic producers of goods.
Economic Factor Regression
Revenues
An analysis of data was conducted using historical economic data found in the StockVal
database. The prime reason to undertake this study was to determine which economic factors
have the greatest impact on Harley-Davidson’s revenues and ultimately stock price. Based on
the regression performed using Minitab, a statistical software package, the key factors affecting
revenues for Harley-Davidson are; disposable income, GDP and population income. An
interaction was discovered between population and income and thus the product of the two fields
(Population * Income) was used to create the new independent variable; Population Income.
There were several elements built into the model each with varying degrees of causality.
Good Predictors
Disposable Income
GDP
Population Income
Weak Predictors
Federal Funds Rate
Unemployment
Population
Consumer Price Index
Overlapping Predictors
Personal Income
Personal Consumption
Personal Savings
Overall the equation that best predicts the revenue for Harley-Davidson based on economic data
is;
Revenue = 10623.31 - 9.165 * Disposable Income – 0.628 * GDP + 0.032 * Population Income.
This model has superb statistical significance as evidenced from the R-squared and F-Factor
results. The model is somewhat counterintuitive in that as both disposable income and GDP rise,
the revenue for the company diminishes. It is unknown at this point why this condition exists. A
possible hypothesis is that as the nation becomes wealthier as a whole, household capital is
placed in wealth building areas such as housing or retirement plans. Another possibility could
also be that the overall wealth of the nation in the form of overall disposable income (as opposed
to per capita) and GDP outstrip the company’s revenue growth. Further studies must be
undertaken to fully understand the reasons behind the numbers.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 7
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Regression Statistics
Multiple R
0.998258763
R Square
0.996520558
Adjusted R Square
0.996238441
Standard Error
78.74101894
Observations
41
ANOVA
df
Regression
Residual
Total
3
37
40
Intercept
Disposable Income
GDP
Population Income
SS
MS
F
65702279.81 21900760 3532.296
229405.4783 6200.148
65931685.28
Coefficients Standard Error
10623.3089
883.2534321
-9.165108224
0.517933296
-0.628469914
0.107632931
0.031575556
0.001389716
t Stat
P-value
12.02748 2.38E-14
-17.69554 1.21E-19
-5.839011 1.04E-06
22.72088 2.49E-23
Figure 6 – Revenue Regression Analysis
Actual vs. Predicted Stock Price
Harley-Davidson
Stock Price
70
A similar analysis was conducted to
discover if a correlation could be
found amongst the previously
mentioned economic factors and the
stock price. Based on the regression
analysis, the model that best
describes the stock price is;
60
50
40
Actual Price
Predicted Price
30
20
Price = 19.054 + 0.01 * Revenue – 0.541 *
Unemployment
10
0
6/15/1994
10/28/1995
3/11/1997
7/24/1998
12/6/1999
4/19/2001
9/1/2002
1/14/2004
5/28/2005
10/10/2006
Figure 7 – Stock Price Regression Graph
Although the model is statistically not
as good as the previous one (though still very statistically significant) the conclusions based on
this model make sense logically. In general, the stock price is strongly correlated to revenues
and negatively correlated to the unemployment rate. The same conclusions could probably be
drawn about any number of stocks in the market.
Regression Statistics
Multiple R
0.94029191
R Square
0.88414888
Adjusted R Square
0.87805145
Standard Error
6.36833414
Observations
41
ANOVA
df
Regression
Residual
Total
Intercept
Revenue
Unemployment
2
38
40
SS
MS
F
11761.43856 5880.719 145.0036
1541.115827 40.55568
13302.55439
Coefficients Standard Error
t Stat
P-value
19.0543371
7.531880641 2.529825 0.015679
0.01415249
0.000844344 16.76151 3.81E-19
-5.4050898
1.583939058 -3.412435 0.001542
Figure 8 – Stock Price Regression Analysis
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 8
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Sector Overview
The consumer discretionary sector is a large and very diverse component of the S&P 500 and
comprises 11.5% of the overall index. The following table shows the breakdown of the sector
into its various sub-sectors. As shown in this table and chart, the sector is indeed highly diverse
and covers a myriad of industries from automobile manufacturers to casinos.
Media
•
Advertising
•
Broadcast and Cable Television
•
Movies and Entertainment
•
Publishing and Printing
Retailing
•
Distributors
•
Internet and Catalog Retailers
•
Multiple Retail
•
Specialty Retailers
Automobiles and Components
•
Auto Parts and Equipment
•
Tires and Rubber
•
Motorcycle Manufacturers
•
Automobile Manufacturers
Consumer Durables and Apparel
•
Household Durables
•
Leisure Equipment and Products
•
Textiles and Apparel
Hotels, Restaurants and Leisure
•
Casinos and Gambling
•
Hotels
•
Leisure Facilities
•
Restaurants
Leisure Equipment and
Products
Auto Components
Distributors
Textiles, Apparel and Luxury
Items
Internet and Catalog Retail
Autos
Media
Household Durables
Multiline Retail
Hotels, Restaurants and
Leisure
Specialty Retail
Figure 9 – Consumer Discretionary Sector Components
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 9
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
As the name implies, this sector is primarily comprised of companies that provide goods and
services to households with extra disposable income, otherwise known as discretionary income.
Household discretionary income is correlated strongly to a number of economic factors and thus
the sector tends to be highly cyclical in nature. When the economy is good and unemployment is
low, businesses in this sector enjoy higher revenues, margins and growth. Conversely, when the
economy is showing weakness and the job market is tight, people are reluctant to purchase an
automobile, take a trip or dine at a restaurant.
S&P CONSUMER DIS. SECTOR COMPOSITE A Price 33.1
1995
1996
1997
1998
1999
2000
2001
2002
2003
StockVal®
2004
2005
2006
HI
LO
ME
CU
3.5
2.0
6.86
0.96
4.86
3.51
1.0
08-11-1995
08-12-2005
0.5
FEDERAL FUNDS RATE %
HI 144.70
LO 61.42
ME 109.68
CU 103.20
GR
0.1%
115
95
75
08-31-1995
07-31-2005
60
CONSUMER CONFIDENCE INDEX
HI
LO
ME
CU
6
5
6.30
3.80
5.20
5.00
4
08-31-1995
07-31-2005
3
UNEMPLOYMENT RATE,SA %
HI
LO
ME
CU
5
5.2
3.4
4.4
4.8
4
09-30-1995
06-30-2005
3
NET PROFIT MARGIN ADJUSTED %
Figure 10 – Factors Affecting Consumer Discretionary Sector
As shown in Figure 10 above, the net profit margin for businesses in this sector are highly
correlated to the Federal Funds Rate, Consumer Confidence Index and the Unemployment Rate.
To elaborate further, the Federal Funds Rate can be seen as a lagging indicator of how this sector
is performing. This naturally makes sense, considering the Reserve Board makes adjustments
based on inflation and GDP which are resultant figures and thus the Fed Rate is changed in
reaction to changes in the spending habits of consumers. This can be especially seen at the
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 10
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
inflection points in the data. An inflection in the profit margin curve is usually accompanied by a
lengthy flat period for the federal funds rate.
The Consumer Confidence Index could be viewed as a leading indicator of the performance of this
sector and the data shows a strong correlation between these two figures. As seen in Figure 10, the
Consumer Confidence Index is rising in step with increases in the profit margins. As the
confidence index level approaches its 10 year mean, we should look for a slow down in the
economy and thus diminishing profit margins for businesses in this sector.
To be precise, the Unemployment Rate is inversely correlated to the profit margins of businesses
in this sector. Again, as seen in figure 10, the profit margins rise when unemployment is low and
increase as unemployment decreases. As mentioned earlier, the economic forecast for job creation
is weakened by outsourcing of jobs to China and India and may create an environment where the
unemployment rate is held at around 5% for a lengthy time frame.
StockVal®
S&P CONSUMER DIS. SECTOR COMPOSITE A Price 33.1
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
HI
LO
ME
CU
1.2
1.37
0.80
1.06
1.22
1.0
08-11-1995
08-12-2005
0.8
PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.2
HI
LO
ME
CU
1.0
1.36
0.66
0.89
1.10
0.8
08-11-1995
08-12-2005
0.6
PRICE / EBITDA RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
0.7
0.6
0.70
0.46
0.58
0.69
0.5
08-11-1995
08-12-2005
0.4
PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
0.9
0.8
0.94
0.62
0.76
0.93
0.7
08-11-1995
08-12-2005
0.6
PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
Figure 11 – Sector Valuations
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 11
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
From a valuation standpoint, the stocks which comprise the Consumer Discretionary Sector of the
S&P 500 are overpriced relative to the broader market. This of course, does not mean that there
cannot be found some good values within this widely diverse sector as certainly Harley-Davidson
fits the criteria.
Industry Analysis
Harley-Davidson is in the Recreational Vehicle sub-sector of the Consumer Discretionary Sector.
This sub-sector represents a very mature industry with cyclical type performance. However, this
sub-sector should do well in the next few years as the trailing edge of the baby-boomer generation
enters pre-retirement age and, for the most part, has well established careers and stable incomes.
This industry typically does well in a burgeoning economy such as this.
Company Analysis
Amongst motorcycle manufacturers with domestic sales, Harley-Davidson is by far the market
leader. With a market share of over 50%, Harley owns more of the US market than all other
manufacturers combined. This figure is stunning considering the competition is fierce and HarleyDavidson motorcycles are often sold at a 50% premium compared to other motorcycle makes on
the market. These figures are not localized to one year, as can be seen from Figure 13, HarleyDavidson’s market share has been steadily increasing year over year while its competitor’s market
share has been steady or declining.
US Motorcycle Market Share
Heavyweight (651+)
Market Share By Year
60
Other
Kawasaki
50
Yamaha
40
Harley
Share (%)
2000
2001
2002
30
2003
Suzuki
2004
20
10
Honda
0
Harley
Figure 12 – US Motorcycle Market Share 2004
Honda
Suzuki
Yamaha
Kawasaki
Other
Figure 13 – US Motorcycle Market Share by Year
This market share can be attributed mostly to Harley-Davidson’s highly recognizable brand image,
loyal customers and the quality of its products. Harley-Davidson’s differentiation strategy has
allowed it to increase its buyer’s willingness to pay for its product line. The company’s loyalty
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 12
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
programs, such as H.O.G,. have further strengthened its toe-hold on the market. The combination
of these forces will provide considerable barriers for the competition to overcome.
Overseas, particularly in Europe and Japan, the company has a small but growing percentage of
the market share. Currently, the number of units sold to these markets is a relatively small portion
of the overall unit sales.
New Products
Entering 2006, six new Harley-Davidson and two
new Buell models have been introduced by the
company. The Dyna family has been retooled and
will now offer, among other things, a six-speed
cruise drive transmission as well as a redesigned
frame to provide an improved ride. In addition,
the motorcycle maker is gearing up for limitedproduction marketing of the Super Glide to mark
its 35th anniversary. The latest model, each of
which will be individually numbered, will feature
35th Anniversary Super Glide1
plenty of chrome to go with its classic design.
Also of note, two additions to the liquid-cooled VRSC family are scheduled to be introduced. At
the same time, Buell Motorcycle Co. will be displaying the Ulysses XB12X adventure sports bike
as well as a longer version of the Lightning XB12S. These additional models should add
excitement and buzz to the brand and give new reasons for prospective customers to visit
showrooms.
Demographics4
In addition to the new product offerings, customer demographics should also help the company’s
growth prospects for the next few years. According to company records, the average Harley
purchaser is a married male in his mid 40’s with an average annual household income of about
$81,000. Based on the average age provided by the company, an assumption can be made as to the
Average Income
Population
35 to 54 Years
Ages 35 to 54
88000
95000
86000
90000
85000
84000
80000
Income
(000s)
82000
80000
75000
70000
78000
65000
76000
60000
74000
72000
1994
55000
1996
1998
2000
2002
2004
2006
2008
2010
2012
50000
1994
1996
1998
2000
Figure 14 – Population and Income Growth Estimates
Year
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
2002
2004
2006
2008
2010
Year
Page 13
of 35
2012
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
typical age range of Harley buyers. An age profile of 35 to 54 year olds should provide the
necessary range to assimilate some expectations for future growth.
According to US Government Census data, the population comprising of 35 to 54 year olds is
expected to rise into 2005, but stabilize after that into 2010. As an aside, the fastest growing
segment of the population from 2005 to 2010 will be 54 to 65 year olds as the baby boomer
generation is entering retirement age.
Despite the non-growth of the segment of the population most likely to purchase a HarleyDavidson motorcycle, the income data tells a more promising story. The incomes of those
individuals aged 35 to 54, men and women, should steadily increase over the next 5 years. The
reason for this is because those individuals who are 35 years old now are most likely entering their
peak earning years. They have more comfortable positions within their respective companies with
regards to earnings, stability and the ability to leverage their collected experiences into new job
prospects. These individuals are most likely to be in management roles. In summary, the data
shows that Harley-Davidson’s customer base is not growing rapidly, but also not shrinking and
more importantly, the incomes of the customer base are expected to grow rapidly for the next 5
years.
Harley-Davidson is expanding its current product line to accommodate a widely ignored market;
women. In 1986, Harley-Davidson sold 600 motorcycles to female riders5. In 2004, the number
grew to 30,000 units. This year, the company is introducing models with seats that sit lower and
offer parts to tailor the ride for females. Although, the company does not have an official
marketing plan for the emerging women rider market, it does have new rider courses specifically
developed for women. It is hoped that women will become more accustomed to motorcycle
ownership through the rider experience and training.
Company Management
Of the 11 key Corporate Executive Officers, only 3 have been employed by the company for less
than 5 years. Stability in management is often a key to the long-term success of a company.
Harley-Davidson has maintained good company governance and currently is not plagued with any
corporate scandals that seem to be prevalent with large companies.
Risks
Regulatory and Environmental
The company’s products are subject to certification by the US Environmental Protection Agency
(EPA) for compliance to emissions and noise standards as well as the California Air Resources
Board. The motorcycles sold in California are subject to unique emissions standards that are
typically higher than those found in the rest of the country. Overseas, the company faces
regulatory emission standards that are higher than those established by the EPA, especially in
Europe and Japan. The company must incur some research and development costs to comply to
these ever increasing air and noise emission restrictions.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 14
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Recalls and Lawsuits
In 2001, the company notified each owner of 1999 and 2000 model year motorcycles equipped
with Twin Cam 88 and Twin Cam 88B engines that the warranty for the rear cam bearing had been
extended by an additional five years or 50,000 miles. A lawsuit was filed against the company
claiming that this bearing may be defective. The company issued the warranty under its own
initiative and costs. Similar warranty claims and/or recalls may reduce profit margins as well as
the perception of quality that allows Harley Davidson to charge a premium price in the market for
its products.
Competition
Another risk to the long-term growth prospects of the company lie not with the traditional
competitors, although they will cut into the advantages that Harley currently maintains, but with
the small scale specialty custom manufacturers, such as Orange County Choppers and Milwaukee
Motor Works. Independent custom shops such as these provide extremely customized bikes at
premium prices to rival or surpass those offered by Harley-Davidson. For Harley’s target market,
differentiation is a key element to desirability of the motorcycles. With the ability to produce only
one motorcycle at a time to the exact requirements of the customer, these shops located all across
the country provide a small but growing threat to the market share dominance Harley-Davidson
currently enjoys. The proliferation of such television shows as American Chopper and Biker
Build-Off as seen on the Discovery Channel and others attest to this growing trend.
Brand Image Loss6
Perhaps the biggest risk to the long term growth prospects for Harley-Davidson is with the current
trendiness of its products. Typically, the stronger the brand is with the older generation, the
weaker it is with the younger generation. So, as a result of Harley-Davidson’s success with the
current Baby-boomer generation, the brand image may actually hurt the company in the future
with Generation X and beyond.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 15
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Financials
Income Statement
Based on the previous 5 year’s growth of approximately 20%, the expected growth of HarleyDavidson for 2005 can conservatively speaking be around 14% with an earnings estimate of
$1,032,128 or $3.50 per share.
The following table shows the previous 5 years earnings with the upcoming 3 years projected out
based on a semi-conservative growth rate of 14% in 2005 and 11% thereafter. Years 2005 and
2006 also show company analysts projections of earnings per share estimations. Growth figures
are in ($000s).
2000
347,713
Growth
Earnings/Sh
Consensus
2001
437,746
21%
1.48
2002
580,217
25%
1.97
2003
760,928
24%
2.58
2004
889,766
14%
3.02
2005
1,032,128
14%
3.50
3.19
2006
1,155,983
11%
3.92
3.53
2007
1,294,702
11%
4.39
2008
1,450,066
11%
4.92
Figure 15 – Revenue Growth Estimates
Looking at the company’s income statement a few key points can be ascertained. The income
statement below shows the year over year net revenue has increased at a faster rate than the cost of
goods sold. Based on this data, it can be said that the operating efficiency of the plant facilities are
improving as new technology becomes available and lower cost methods of production are
utilized.
Net revenue
COGS
Gross Profit
2000
% Change
2943346
16%
1979572
14%
963774
20%
2001
% Change
3406786
20%
2253815
19%
1152971
23%
2002
% Change
4090970
13%
2673129
11%
1417841
17%
2003
% Change
4624274
8%
2958708
5%
1665566
14%
2004
5015190
3115655
1899535
Financial Services income
Financial Services expense
Operating income from financial services
140135
102957
37178
30%
17%
65%
181545
120272
61273
17%
-11%
70%
211500
107273
104227
32%
4%
61%
279459
111586
167873
9%
5%
12%
305262
116662
188600
Income before provision for income taxes
Provision for income taxes
Net income
548556
200843
347713
23%
17%
26%
673455
235709
437746
32%
30%
33%
885827
305610
580217
32%
33%
31%
1166035
405107
760928
18%
21%
17%
1379486
489720
889766
Figure 16 – Income Statement Summary
It is also important to note that the overall net income has been very strong for the company for the
last five years. This trend is likely to continue into the next few years and the company should see
net income continuing to rise.
The basic drivers behind earnings growth will be sales of new units. This is particularly true if the
company can embrace its female constituents and foster more sales in overseas markets. Even
amongst the traditional customer base, the new models introduced this year along with the housing
boom where homeowners can “cash out” the equity built up in their homes to make purchases and
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 16
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
the strengthening economy should all provide the catalyst for continued strong sales for this
motorcycle manufacturer.
Balance Sheet
The balance sheet for the company is strong. The company has been able to increase shareholder
equity by 23% over the last five years, while keeping long term debt at a minimum. The company
has been able to repurchase some of its stock, which should also lift share price.
HDI Balance Sheet
Assets
Cash
Marketable securities
Accounts receivable
Finance receivables
(current)
Inventories
Deferred income taxes
Prepaid expenses
Finance receivables
PPE
Goodwill
Other
Total Assets
Liabilities
Accounts Payable
Accrued expenses
Finance debt (current)
Finance debt
Long term
Healthcare benefits
Deferred income taxes
Total Liabilities
2000
2001
2002
2003
2004
2005E
2006E
2007E
419736
0
98311
439438
196011
118843
280928
514800
108694
329329
993331
112406
275159
1336909
121333
530859
191931
28280
28147
234091
754115
54331
96603
2436404
656421
181115
38993
34443
379335
891820
49711
132365
3118495
855771
218156
41430
46807
589809
1032596
49930
122296
3861217
1001990
207726
51156
33189
735859
1046310
53678
358114
4923088
1207124
226893
60517
38337
905176
1024665
59456
227724
5483293
6334010.7
7123848
7913684.9
169844
238390
89509
355000
81707
80666
15633
1030749
194683
304376
217051
380000
158374
89912
17816
1362212
226977
380496
382579
380000
123353
105419
29478
1628302
223902
407566
324305
670000
86337
127444
125842
1965396
244202
433053
495441
800000
90846
149848
51432
2264822
2571695.2
2878828
3185961.2
Figure 17 – Balance Sheet
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 17
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Balance Sheet (continued)
Year
2000
2001
2002
2003
2004
Assets
2,436,404,000
3,118,495,000
3,861,217,000
4,923,088,000
5,483,293,000
Liabilities
497,743,000
716,110,000
990,052,000
955,773,000
1,172,696,000
Current Ratio
4.89
4.35
3.90
5.15
4.67
Figure 18 - Assets, Liabilities and Current Ratios
As evidenced in Figure 18, the average current ratio is 4.59. In general, the higher the current
ratio, the more financially secure the company is. However, in Harley-Davidson’s case, most of
the assets would be tied up in specific industry property plant and equipment that may be difficult
to liquidate. Nonetheless, these are comfortable numbers.
Year
2000
2001
2002
2003
2004
Sales
1,979,572,000
2,253,815,000
2,673,129,000
2,958,708,000
3,115,655,000
Inventory
191,931,000
181,843,000
218,156,000
207,726,000
226,893,000
Turnover
10.3
12.4
12.3
14.2
13.7
Average12.6
Figure 19 - Sales, Inventory and Turnover Ratios
The turnover ratio averaged 12.6 which means that Harley completely replenishes inventory on
average 12.6 times per year or roughly once per month. In addition, the turnover ratio has been
even higher in the last 2 years, providing evidence of strong sales and high demand for the
manufacturer’s product lines.
Cash Flows
The company has been able to maintain an 18% increase in cash flow from operations
(manufacturing and sales) over the last 5 years. The driving force behind the increase is simply
increased sales. Harley-Davidson’s cash flow was particularly strong in 2003 because the
company was celebrating its 100th anniversary. Several commemorative motorcycles were
produced along with scores of collectible memorabilia and clothing. In addition, several events
were held around the country to mark the occasion which certainly drew more people into
dealership showrooms.
A method to determine the true market value of a stock known as the discount cash flow model has
been set up using the company’s cash flow statements and several assumptions about the growth
projections of the company and the stock market in general.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 18
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Free Cash Flow Model
Ticker Company Name
HDI
Harley Davidson Motorcycles
Annual Net Income
Annual Depreciation
Gain on Sale of Credit Card Business
Employee Benefits
Finance credit losses
Securitizations
Finance Receivables
Pension Plan
Stock Options
Income Taxes
Other
Net changes in assets and liabilities
Total adjustments
Cash from Operations
Annual CF Capital Expenditures
Finance Receivables Acquired
Finance Receivables Collected
Proceeds from Securitizations
Collection of retained securitized interests
Purchase of marketable securities
Sales and redemptions of marketable securities
Purchase of remaining interest in joint venture
Other, net
Cash from Investments
Annual CF Issuance of Medium term notes
Commercial Paper
Dividends
Purchase of common stock
Issuance of common stock
Cash from Financing
Free Cash Flow
Cash from Operations
Cash Flow from capital expenditures
Cash Flow from Financing
Free Cash Flow
2003
760.9
196.9
0.0
76.4
4.1
-82.2
-154.8
-192.0
13.8
42.1
16.1
18.6
-61.0
2002
580.2
175.8
0
57.1
6.2
-56.1
-140.1
-153.6
14.5
38.6
7.1
16.1
-34.4
2001
437.7
153.1
0
40.9
22.2
0
0
-19.3
44.9
-3.5
3
77.8
319.1
2000 Average
347.7
603.3
133.3
174.6
-18.9
-3.8
17.4
50.9
9.9
9.1
0
-39.3
0
-89.8
-12.8
-75.5
35.9
32.1
1.4
7.4
1.8
11.1
49.6
27.4
217.6
104.3
969.8
699.9
545.8
756.8
565.3
707.5
-213.6
-2,394.6
274.7
1,847.9
125.7
-1,091.3
742.3
9.5
10.7
-227.2
-2,090.2
252.7
1,724.1
118.1
-1,538.5
1,145.0
0.0
9.7
-323.9
-1,731.2
230.2
1,246.3
90.0
-1,508.3
1,253.7
0.0
22.8
-290.4
-4,387.3
3,123.9
987.7
0.0
-248.0
52.0
1.9
-7.5
-203.6
-3,556.2
2,727.7
723.9
0.0
0.0
0.0
18.8
-14.1
-251.7
-2,831.9
1,321.8
1,306.0
66.8
-877.2
638.6
6.0
4.3
-688.7
-606.3
-720.4
-767.7
-303.5
-617.3
0.0
305.0
-119.2
-564.1
62.2
399.9
-175.8
-59.0
-103.9
19.4
0.0
165.5
-41.5
-56.8
12.7
0.0
152.5
-35.4
-111.6
28.8
0.0
-16.7
-30.1
-126.0
14.6
80.0
86.1
-57.0
-192.5
27.5
-316.1
80.6
79.9
34.3
-158.2
-55.9
969.8
-251.7
0.0
718.1
Year
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2004
889.8
214.1
0.0
62.8
3.1
-58.3
-154.1
0.0
51.5
-41.5
27.3
-24.9
80.0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
14.50%
9.51%
Free Cash
Growth
Discount
Discounted
Flow
Rate
Rate
CF
718.1
1.0951
718.1
822.2
1.15
1.0951
750.8
941.4
1.15
1.0951
784.9
1,077.9
1.15
1.0951
820.7
1,234.2
1.15
1.0951
858.1
1,413.1
1.15
1.0951
897.1
1,618.1
1.15
1.0951
938.0
1,852.7
1.15
1.0951
980.7
2,121.3
1.15
1.0951
1,025.4
2,428.9
1.15
1.0951
1,072.1
2,781.1
1.15
1.0951
1,120.9
3,184.4
1.15
1.0951
1,171.9
3,646.1
1.15
1.0951
1,225.3
4,174.8
1.15
1.0951
1,281.1
4,780.1
1.15
1.0951
1,339.5
5,473.2
1.15
1.0951
1,400.5
38,267.4
Annual Common Shares Outstanding
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
16,385.1
274.4
Page 19
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
The model takes into account the most recent cash flow statement’s net income and determines the
net present value of the net income for 15 years into the future. Provided that the assumptions are
correct, Harley-Davidson’s stock price is projected to be $59.71. With a current price of $52.11
per share as of August 12, the upside potential is around 15%.
Projected Price
Current Price
Discount (Premium) to Current Price
Possible Price Appreciation
59.71
52.11
7.60
14.59%
Cost Of Equity
Beta
Risk Free Rate (3-mo t-bill)
Mkt Premium
CAPM = Expected return=R(f)+beta (Mkt Prem)
# of diluted shs outstanding (000)
Price
Mkt Value of Equity (000)
Long term rate of growth-company
1.13
3.43%
5.38%
9.51%
274,400.0
52.11
14,299
14.500
Mkt Premium
Recent Price
Div/Sh
Long term rate of growth-the market
K
Mkt Premium (K-Risk Free Rate)
1230.00
10.00
8.00%
8.81%
5.38%
Figure 20 – Projected Stock Price Estimation Using DCF Model
Market Returns
The discount cash flow model is based on a cost of capital rate of 9.51%, a risk free rate of 3.43%
and a long term growth rate for the company at 14.5%. It is believed that this growth rate can be
maintained for several years to come based on the previously described economic and
demographic factors. Despite the company guidance suggesting a 7 to 9% growth rate, it is
believed these figures are overly conservative and much higher growth rates should be anticipated.
Long-Term Growth Rate
10
12
14
8
9
10
43.3
40.09
37.24
49.82
45.95
42.51
57.56
52.89
48.75
16
18
20
66.76
61.12
56.12
77.7
70.88
64.86
90.72
82.48
75.21
Figure 21 – Price Sensitivity Analysis
From the discounted cash flow model a sensititivty matrix can be obtained. The possible price
outcomes range from $37.24 to $90.72. The middle ground estimate leads the author to the
conclusion that the stock is currently undervalued and should hit the $60 price target within the
next 6 months.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 20
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Return on Equity
In addition to strong cash flows and a healthy balance sheet, the company has attained a
phenomenal return on equity since its inception in 1986. Despite the numerous recessions, breakout periods and times of stagnant growth during this almost 20-year span, the company has been
able to achieve a return of approximately 23% year in and year out. The management is able to
achieve this by constantly improving the sales margins, reducing the tax burdens and leveraging
debt to maximize investment opportunities.
The trailing twelve month returns for the management have been 29.77, 18.26 and 22.25 percent
for return on equity, return on assets and return on investments respectively. These figures are
incredibly remarkable considering the global trend of manufacturers to outsource the labor
intensive portions of the business to overseas facilities. Despite the above average labor costs, the
company is able to achieve such strong returns.
DuPont Analytics
StockVal ®
HARLEY-DAVIDSON INCORPORATED (HDI)
Price 51.410 08/05/05 FYE Dec
INT
MARGIN%
EBIT
------Sales
BURDEN
EBT
------EBIT
TAX
BURDEN%
T
ASSET
TURN
LEVERAGE
Sales
Assets
1 - ----
-------
-------
ROE
Acct
ROE
EBT
Assets
Equity
Rpt%
Adj%
Adj%
2004
27.51
1.00
64.50
0.96
1.68
28.81
0.00
28.81
2003
25.22
1.00
65.26
1.05
1.69
29.32
0.00
29.32
2002
21.65
1.00
65.50
1.17
1.75
29.09
0.00
29.09
2001
19.77
1.00
65.00
1.23
1.76
27.69
0.00
27.69
2000
18.64
1.00
63.39
1.29
1.77
27.09
-0.53
26.56
1999
16.95
1.00
63.50
1.23
1.84
24.39
0.00
24.39
1998
16.11
1.00
63.50
1.19
1.90
23.00
0.00
23.00
1997
15.68
1.00
63.00
1.21
1.96
23.37
0.00
23.37
1996
14.87
1.00
63.00
1.32
2.01
28.69
-3.91
24.78
1995
13.13
0.99
63.10
1.61
1.81
24.25
-0.31
23.94
1994
13.56
1.00
61.51
1.92
1.59
27.51
-2.13
25.38
1993
13.66
1.00
60.05
1.86
1.52
-3.60
26.72
23.12
1992
11.79
0.94
62.13
1.83
1.57
18.76
1.00
19.76
1991
12.19
0.90
62.44
1.69
1.90
16.93
5.18
22.11
1990
8.57
0.85
61.18
2.20
2.22
21.31
2.69
24.00
1989
8.97
0.75
61.52
2.03
2.81
23.71
-0.24
23.47
1988
9.68
0.67
59.02
1.81
4.24
25.91
7.05
32.96
1987
8.45
0.57
57.28
1.82
7.96
47.64
-7.96
39.68
Figure 22 – Dupont Analysis
Note: highlighted area added by author for emphasis.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 21
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Valuation
Currently Harley-Davidson stock looks relatively undervalued. It is currently priced below its 10
year mean for the P/E, P/EBITDA, P/S and P/CF by a considerable margin. It is interesting to note
that the late 90’s represented a period for the company highlighted by strong stock price
appreciation and valuation increases as evidenced in Figure 23. All will remember this was a time
of the dot-com stock market bubble and record-setting economic growth. It is likely that since, for
the most part, all stocks were rising, Harley-Davidson stock was also rising as the valuations were
well above the mean. However, unlike the dot-com stocks that eventually destroyed trillions of
dollars in market capitalization when the bubble burst, Harley-Davidson has lived up to its
expectations and delivered its expected price appreciation. Simply put, there was no bubble in the
price of Harley-Davidson stock. The company is well rooted and here to stay. Sales have met or
exceeded expectations time and time again and should continue to do so for at least the next five
years.
StockVal®
HARLEY-DAVIDSON INCORPORATED (HDI) Price 51.4
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
HI
LO
ME
CU
32
24
39.6
13.3
21.1
14.5
16
08-04-1995
08-05-2005
8
PRICE / YEAR-FORWARD EARNINGS
HI
LO
ME
CU
24
18
25.3
8.3
13.6
9.0
12
08-04-1995
08-05-2005
6
PRICE / EBITDA
HI
LO
ME
CU
4
5.58
1.47
3.47
2.94
2
08-04-1995
08-05-2005
0
PRICE / SALES
HI
LO
ME
CU
32
24
37.0
12.0
19.3
13.5
16
08-04-1995
08-05-2005
8
PRICE / CASH FLOW ADJUSTED
Figure 23 – Valuation Ratios
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 22
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
In addition to a currently underpriced security, investors in Harley-Davidson are also getting a
solid performing stock. As compared to the broader market, Harley-Davidson has produced above
average revenues, revenues-per-share, return on equity, return on capital, net profit margins,
dividend yields and earnings (Figures 24 and 25). All while maintaining a very low debt level
(Figure 26).
StockVal®
HARLEY-DAVIDSON INCORPORATED (HDI) Price 51.4
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
HI
LO
ME
CU
2.5
2.0
2.89
1.10
1.78
1.87
1.5
08-04-1995
08-05-2005
1.0
PRICE / BOOK VALUE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
4
2.40
1.00
1.60
2.17
2
09-30-1995
06-30-2005
1
REVENUES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
4
2.26
1.00
1.54
2.19
2
09-30-1995
06-30-2005
1
REVENUE-PER-SHARE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
FY1
FY2
4
2
4.03
1.00
1.65
3.90
3.89
3.92
09-30-1995
06-30-2005
1
EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
StockVal®
HARLEY-DAVIDSON INCORPORATED (HDI) Price 51.4
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
HI
LO
ME
CU
1.8
1.6
2.00
1.20
1.38
1.70
1.4
09-30-1995
06-30-2005
1.2
RETURN ON EQUITY RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
3
3.58
1.96
2.25
2.87
2
09-30-1995
06-30-2005
1
RETURN ON CAPITAL RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
2.0
1.6
2.15
1.17
1.37
2.11
1.2
09-30-1995
06-30-2005
0.8
NET PROFIT MARGIN ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
0.6
0.4
0.73
0.15
0.30
0.70
0.2
08-04-1995
08-05-2005
0.0
DIVIDEND YIELD RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
Figures 24 and 25 – Management Effectiveness Relative to S&P 500
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 23
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
StockVal®
HARLEY-DAVIDSON INCORPORATED (HDI) Price 51.4
1995
1996
1997
1998
1999
2000
2001
2002
2003
August 12, 2005
NYSE Listed: HDI
2004
2005
2006
4
HI
LO
ME
CU
3
2
3.7
0.0
0.6
0.0
1
12-31-1995
12-31-2004
0
LONG-TERM DEBT / CAPITAL %
32
30
HI
LO
ME
CU
28
26
30.2
21.2
25.2
29.5
24
22
09-30-1995
06-30-2005
20
RETURN ON CAPITAL %
32
30
HI
LO
ME
CU
28
26
30.1
21.8
25.4
29.5
24
22
09-30-1995
06-30-2005
20
RETURN ON EQUITY %
Figure 26 – Management Effectiveness
Absolute
Valuation
High
Low
Mean
Current
Target
Multiple
P/Forward E
P/S
P/B
P/EBITDA
P/CF
39.6
5.58
12.1
25.3
37.0
13.3
1.47
3.7
8.3
12.0
21.1
3.47
6.1
13.6
19.3
14.5
2.94
4.5
9.0
13.5
19
3.25
5.5
12
18
Target E,
S, B,
etc/Share
3.29
18.96
12.69
5.32
2.43
Target
Price
(F x G)
62.51
61.63
69.77
63.8
43.75
Figure 27 – Valuation Estimates
It would appear that the current stock price indicates a market underweighting. Just how much
does the market undervalue this security? Using the company’s historical averages, and target
ratios, the fair value can be determined. From the data outlined in Figure 27, the average of the
five valuations indicates a price target of $60.29. Since the current valuation ratios are well below
the mean, even a conservative reversion towards the mean should lead to stock price appreciation.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 24
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Even when compared to the S&P 500, this security appears to be undervalued. Looking at the
historical averages relative to the S&P 500, this stock is well below the mean for all valuations
except Price/Sales and even this number is not considerably higher than the mean.
StockVal®
HARLEY-DAVIDSON INCORPORATED (HDI) Price 51.4
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
HI
LO
ME
CU
1.4
1.2
1.43
0.82
1.12
0.97
1.0
08-04-1995
08-05-2005
0.8
PRICE / YEAR-FORWARD EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
4
2.68
1.15
1.86
1.17
2
08-04-1995
08-05-2005
1
PRICE / EBITDA RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
2.5
2.0
2.97
1.17
1.95
2.02
1.5
08-04-1995
08-05-2005
1.0
PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
HI
LO
ME
CU
2.0
1.6
2.31
1.11
1.58
1.20
1.2
08-04-1995
08-05-2005
0.8
PRICE / CASH FLOW ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
Figure 28 – Valuations compared to the S&P 500
In summary, from a valuations standpoint, a prospective investor in Harley-Davidson stock is
getting an undervalued, over-performing stock as compared to other stocks in the S&P 500. As
soon as the market realizes this bargain, the price should provide significant gains in the short run.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 25
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Technical Analysis7
As stated earlier, the stock price dropped 17% in one trading day following a negative company
release detailing the decline in the number of units to be shipped for the second half of 2005. The
market reacted to the news by sending the price of the stock to its 2 year low of $46. This price
level is obviously a price support and a psychological barrier inhibiting further decline. Since
then, the stock price has steadily increased over the last few months as value investors looking for
bargains, have been purchasing the stock. It is believed based on the past trends, that the stock
will settle back towards the $58 to $62 range. Investors are realizing that the market oversold back
in April and this is the primary reason for the relatively quick recovery. Expect the price to fully
recover by early Spring 2006.
Resistance
Recovery
Support Level
Figure 29 – Resistance and Support Levels for HDI
Recommendation
Harley-Davidson, Inc., as a company, has enjoyed some outstanding revenues and returns over the
last ten years. Of course much of that success has been priced into the stock at its current price
levels. But the author believes strongly that the market correction back in April was overdone and
reiterates the progressive return back to the previous price levels.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 26
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
In summary, the valuation, DCF and technical analysis estimates point to $60 per share as the near
term price target.
Method
DCF
Valuation
Technical Analysis
Target
$59.71
$60.29
$58-$62
This is not to say that investors in Harley-Davidson stock should adopt a “buy and hold” strategy
in regards to this holding. The long term prospects for this company are more discouraging. As
the baby-boomer population ages, psychology suggests that the generation replacing them is less
likely to purchase Harley-Davidson products. If the manufacturer cannot embrace female riders or
obtain a stronger presence in the overseas arenas, a drop in unit sales is might result.
A good point for the stock is that it seems to weather the economic environment fairly well.
Perhaps this is because Harley’s customers are more comfortable in their position in life and are
not as susceptible to becoming unemployed or seeing wage decreases. The customer base tends to
have fairly above average incomes when compared to the population as a whole.
However, the strategy with any stock purchase should be to realize gains. In that light, the
recommendation is to purchase the stock at its current price. Once the price approaches or hits the
price target, close the position. It is not recommended to hold the position longer than one year
regardless of the price past one year. There are too many long-term uncertainties to speculate on
the success or failure of the business. However, if past performance is any indication, HarleyDavidson will still do well. But as is often said, “Past performance is not a predictor of future
results.”
Acknowledgements
The author would like to especially thank Mr. Royce West for his help in providing the tools
necessary to prepare this analysis. I have learned a great deal from his course and hopefully will
parlay some of these techniques into a future career in investing.
I would also like to thank my wife who has tolerated my absence for the past three months while I
have been attempting, sometimes futilely to mine meaningful data from the StockVal computers in
the dark recesses of Mason Hall.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 27
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
References
1.
2.
3.
4.
5.
6.
7.
Harley-Davidson SEC filings, 2004 10-K
Business Today, Keeping the faith, August 14, 2005
July 2005 Consumer Confidence Index, The Conference Board.
Census Bureau statistics
Associated Press Newswires, Number of women bikers growing. August 12, 2005.
Tribune Business News, Harley-Davidson banks on baby boomers. July 01, 2005.
Getting Started in Technical Analysis, Jack D. Schwager, John Wiley and Sons, pgs
148-149.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 28
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
Exhibit 1
August 12, 2005
NYSE Listed: HDI
HARLEY-DAVIDSON, INC.
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2004, 2003 and 2002
(In thousands, except per share amounts)
2004
Net revenue
Cost of goods sold
Gross profit
$
Financial services income
Financial services expense
Operating income from financial services
Selling, administrative and engineering expense
Income from operations
Investment income, net
Other, net
Income before provision for income taxes
Provision for income taxes
Net income
Basic earnings per common share
Diluted earnings per common share
Cash dividends per common share
2003
5,015,190 $
3,115,655
1,899,535
305,262
116,662
188,600
2002
4,624,274 $
2,958,708
1,665,566
279,459
111,586
167,873
$
726,644
1,361,491
23,101
(5,106)
1,379,486
489,720
889,766 $
684,175
1,149,264
23,088
(6,317)
1,166,035
405,107
760,928 $
$
$
$
3.02 $
3.00 $
.405 $
2.52 $
2.50 $
.195 $
4,090,970
2,673,129
1,417,841
211,500
107,273
104,227
639,366
882,702
16,541
(13,416)
885,827
305,610
580,217
1.92
1.90
.135
The accompanying notes are an integral part of the consolidated financial statements.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 29
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
Exhibit 2
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
HARLEY-DAVIDSON, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2004 and 2003
(In thousands, except share amounts)
2004
ASSETS
Current assets:
Cash and cash equivalents
Marketable securities
Accounts receivable, net
Current portion of finance receivables, net
Inventories
Deferred income taxes
Prepaid expenses and other current assets
Total current assets
$
Finance receivables, net
Property, plant and equipment, net
Goodwill
Other assets
$
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued expenses and other liabilities
Current portion of finance debt
Total current liabilities
Finance debt
Other long-term liabilities
Postretirement healthcare benefits
Deferred income taxes
$
2003
275,159 $
1,336,909
121,333
1,207,124
226,893
60,517
38,337
3,266,272
329,329
993,331
112,406
1,001,990
207,726
51,156
33,189
2,729,127
905,176
1,024,665
59,456
227,724
5,483,293 $
735,859
1,046,310
53,678
358,114
4,923,088
244,202 $
433,053
495,441
1,172,696
223,902
407,566
324,305
955,773
800,000
90,846
149,848
51,432
670,000
86,337
127,444
125,842
—
—
Commitments and contingencies (Note 6)
Shareholders’ equity:
Series A Junior participating preferred stock, none issued
Common stock, 329,908,165 and 326,489,291 shares issued in 2004 and 2003,
respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive (loss) income
Less:
Treasury stock (35,597,360 and 24,978,798 shares in 2004 and 2003,
respectively), at cost
Total shareholders’ equity
3,300
533,068
3,844,571
(12,096)
4,368,843
3,266
419,455
3,074,037
47,174
3,543,932
(1,150,372)
3,218,471
$ 5,483,293 $
(586,240)
2,957,692
4,923,088
The accompanying notes are an integral part of the consolidated financial statements.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 30
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
Exhibit 3
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
HARLEY-DAVIDSON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2004, 2003 and 2002
(In thousands)
2004
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation
Provision for long-term employee benefits
Provision for finance credit losses
Gain on current year securitizations
Net change in wholesale finance receivables
Contributions to pension plans
Tax benefit from the exercise of stock options
Deferred income taxes
Other
Net changes in current assets and current liabilities
Total adjustments
Net cash provided by operating activities
$
Cash flows from investing activities:
Capital expenditures
Finance receivables acquired or originated
Finance receivables collected
Proceeds from securitizations
Collection of retained securitization interests
Purchase of marketable securities
Sales and redemptions of marketable securities
Purchase of remaining interest in joint venture
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from issuance of medium term notes
Net increase (decrease) finance credit facilities and commercial
paper
Dividends paid
Purchase of common stock for treasury
Issuance of common stock under employee stock option plans
Net cash (used) provided by financing activities
889,766 $
$
760,928 $
2002
580,217
214,112
62,806
3,070
(58,302)
(154,124)
—
51,476
(41,513)
27,301
(24,866)
79,960
969,726
196,918
76,422
4,076
(82,221)
(154,788)
(192,000)
13,805
42,105
16,051
(18,644)
(98,276)
662,652
175,778
57,124
6,167
(56,139)
(140,107)
(153,636)
14,452
38,560
7,057
16,089
(34,655)
545,562
(213,550)
(2,394,644)
274,670
1,847,895
125,732
(1,091,326)
742,284
(9,500)
10,689
(707,750)
(227,230)
(2,090,201)
252,705
1,724,060
118,113
(1,538,548)
1,145,000
—
9,690
(606,411)
(323,866)
(1,731,169)
230,153
1,246,262
89,970
(1,508,285)
1,253,719
—
22,813
(720,403)
—
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents:
At beginning of year
At end of year
2003
399,953
—
305,047
(119,232)
(564,132)
62,171
(316,146)
(175,835)
(58,986)
(103,880)
19,378
80,630
165,528
(41,457)
(56,814)
12,679
79,936
(54,170)
136,871
(94,905)
329,329
275,159 $
192,458
329,329 $
287,363
192,458
The accompanying notes are an integral part of the consolidated financial statements.
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 31
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Exhibit 4 - Population by Sex and Age
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 32
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Exhibit 5 – Population Projections by Sex and Age
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
Page 33
of 35
6/30/2005
3/31/2005
12/31/2004
9/30/2004
6/30/2004
3/31/2004
12/31/2003
9/30/2003
6/30/2003
3/31/2003
12/31/2002
9/30/2002
6/30/2002
3/31/2002
12/31/2001
9/30/2001
6/30/2001
3/31/2001
12/31/2000
9/30/2000
6/30/2000
3/31/2000
12/31/1999
9/30/1999
6/30/1999
3/31/1999
12/31/1998
9/30/1998
6/30/1998
3/31/1998
12/31/1997
9/30/1997
6/30/1997
3/31/1997
12/31/1996
9/30/1996
6/30/1996
3/31/1996
12/31/1995
9/30/1995
6/30/1995
Current
Revenue Disposable Income GDP
Population Population Income Unemployment Fed Funds Consumer Price Index Non DurablesPersonal Consumption Personal Income
50.86
5090.5
8169.1
11092
296.5
2422138.15
5
3.36
178.2
7869.8
9300
56.78
5085
8112.9 10999.3
295.82
2399958.078
5.2
2.83
177
7779.7
9261.9
60.75
5015.2
8392.9 10897.1
295.19
2477500.151
5.4
1.97
173.3
7739.8
9482.5
59.71
4952.3
8002.6 10808.9
294.45
2356365.57
5.4
1.86
172.8
7638.7
8996.3
61.06
4785.2
7935.6 10704.1
293.66
2330368.296
5.6
1.25
174
7539.1
8912.2
52.84
4676.3
7924.2 10612.5
292.97
2321552.874
5.7
1
170.3
7522.2
8850
47.2
4624.3
7875.3 10502.6
292.34
2302265.202
5.7
1.01
165.4
7453.4
8832
49.45
4492.7
7775.3 10410.9
291.58
2267121.974
6.1
0.99
167.4
7368.9
8728.3
40.06
4494.6
7726 10230.4
290.78
2246566.28
6.3
1.08
163.9
7297.2
8685.6
39.8
4276.8
7610.2 10138.6
290.08
2207566.816
5.8
1.26
167.2
7206.3
8576.3
45.76
4090.9
7574 10095.8
289.44
2192218.56
6
1.12
161.6
7188.4
8550.3
47.23
3970.3
7543.5 10090.7
288.71
2177883.885
5.7
1.78
162.2
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8549
51.27
3696.4
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287.93
2187058.694
5.8
1.73
161.2
7098.1
8617.5
55.13
3557.6
7563.4
9977.3
287.25
2172586.65
5.7
1.77
160.2
7046.7
8582
55.08
3406.7
7374.2
9910
286.62
2113593.204
5.7
1.54
156.8
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40.5
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7472.6
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285.88
2136266.888
5
2.75
162.3
6866.8
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47.08
3128
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285.08
2067457.176
4.5
3.95
162.7
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37.95
3029.9
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284.37
2073455.418
4.3
5.29
160.3
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39.75
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283.71
2057152.839
3.9
5.41
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47.88
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282.95
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3.9
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282.14
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280.72
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269.39
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143.6
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267.94
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5.6
4.73
139.7
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267.15
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5.6
6.2
139.9
5476.3
6742.3
6
1253.9
5900
7988
267
1575300
5.6
6.2
139.7
5436
6700
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Exhibit 6 – Raw Data for Regression Analysis
Page 34
of 35
Harley Davidson, Inc.
Current Price: $52.11
Recommendation: BUY
12-Month Price Target: $60.00
12-Month Range: $45.14 - $63.23
August 12, 2005
NYSE Listed: HDI
Exhibit 7 – Output from regression analysis using all independent variables
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.9986502
R Square
0.997302221
Adjusted R Square
0.996518995
Standard Error
75.74769014
Observations
41
Revenue
ANOVA
df
Regression
Residual
Total
Intercept
Disp Inc
GDP
Pers Cons
Pers Inc
Fed Funds
Unemploy
Pers Saving
CPI
Population
9
31
40
SS
65753816.19
177869.0894
65931685.28
Coefficients Standard Error
-17954.32922
6608.838893
1.583308213
0.604432823
-0.049390128
0.331399719
0.940246327
0.485673392
-1.437364279
0.327713732
40.01077901
23.89789824
166.6070212
77.51810737
-42.43789775
41.82259902
17.86363254
7.226365115
42.32178376
35.61735846
Joshua P. Siler, Fisher College of Business
Harley-Davidson, Inc. August 12, 2005
MS
F
ignificance F
7305979.577 1273.326173 3.03E-37
5737.712562
t Stat
-2.716714616
2.619494101
-0.149034912
1.935964255
-4.386036159
1.674238404
2.149265854
-1.014712111
2.472008022
1.18823477
P-value
Lower 95%Upper 95%Lower 95.0%
Upper 95.0%
0.010688091 -31433.14 -4475.513 -31433.14 -4475.513
0.013509895 0.350559 2.816057 0.350559 2.816057
0.882491408 -0.725284 0.626504 -0.725284 0.626504
0.062036551 -0.050291 1.930784 -0.050291 1.930784
0.000123651 -2.105741 -0.768988 -2.105741 -0.768988
0.104145497 -8.729306 88.75086 -8.729306 88.75086
0.039531676
8.5078 324.7062
8.5078 324.7062
0.318097761 -127.7357 42.85985 -127.7357 42.85985
0.019128945 3.125364 32.6019 3.125364 32.6019
0.24376481 -30.3203 114.9639 -30.3203 114.9639
Page 35
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