The Price Will GO UP despite Harley-Davidson’s Poor PerformanceHey, Monfex traders!
So Much For Free Trade… US President Donald Trump is at it again, this time threatening to impose punitive tariffs on the European Union because of...a motorcycle company? Trump, who had earlier advocated for a boycott of Harley-Davidson , seems to have forgotten all his previous criticisms amid a 27% drop in the company’s Q1 earnings. Instead, he tweeted that due to a 31% tariff on Harley-Davidson in the EU, the US will ‘reciprocate.’
But Is That True? Sort of! While revenue did fall by 26.8%, earnings per share actually beat analysts expectations significantly, 98 cents per share vs 65 cents forecast.
Will The Tariffs hurt? Well, it’s always hard to tell whether or not any given Trump tweet is going to be reflected in policy, but the US President has not shied away from starting trade wars with major partners, such as China, which has endured no less than three separate rounds of tariffs. However, the chief of the World Trade Organization has stated that, as a result, global trade is facing its worst crisis since 1947.
Harley Davidson’s future still looks bleak despite the above-average earnings numbers, with the company saying that it has struggled to attract younger buyers to the brand. It’s launched a new series of electric motorcycles, and opened new motorcycle schools across the US in response to this decline.
Wut We Think: With Harley’s share price taking a 2% dive since its earnings report , it’s hard to see how tariffs will have a strong impact, even if they’re implemented. After all, the fundamentals still remain, and millenials, already struggling with the burdens of high college loans and souring on private transport, will likely not become major Harley fans overnight. It’s worth keeping an eye on their electric motorcycle program, but there’s a good chance that Harley is looking at rougher waters ahead.
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