The stock shares for Harley-Davidson Inc. rose today, a day after the Milwaukee-based motorcycle manufacturer announced its board has authorized the company to take on $750 million in long-term debt to repurchase up to 15 million shares of its stock.
The new repurchase authorization is in addition to the share repurchases that the board authorized in February 2014, in which the company was authorized to repurchase up to 20 million shares of its common stock with no dollar limit.
With the news that the company plans to buy back more of its stock, Harley’s stock rose $2.90 per share to trade at $59.56 per share on the New York Stock Exchange today.
The announcement drew mixed reviews on Wall Street.
Moody’s Investors Service said Harley’s decision to take on more debt to repurchase stock shares “is a credit negative event.” Still, Moody’s retained its “stable outlok for Harley-Davidson Financial Services Inc.
UBS analyst Robin Farley upgraded Harley’s stock to “buy” from “Neutral” with a $63 per share price target.
However, Farley cautioned that her upgrade is a valuation call and not a change in profit or revenue outlook for Harley.