(MONEY Magazine) – HARLEY REVS UP ITS PROFITS Most motorists defer to guys on Harley-Davidsons, but the motorcycle maker's stock doesn't get the respect it deserves, analysts say. Since losing $6.61 a share in 1982, Harley's profits have bounced back to $3.57 a share. Tariffs that restricted Japanese imports until 1986 have enabled Harley's market share to double to 46%. Can Harley (with 1988 sales of about $758 million) hold its lead? Analysts say yes. ''By adopting Japanese techniques, Harley-Davidson has become one of the most efficient U.S. manufacturers,'' says Arthur Davis at the Cleveland brokerage Prescott Ball & Turben. At $25, the stock is selling at only six times estimated 1989 earnings. One reason: although Harley has been paying off its loans, its debt still equals 55% of capital, making the stock best suited for investors who can take moderate risks, Davis says. He believes that the stock could top $40 in 1989, where he would consider selling it.

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