Polaris Stock Soars on Indian Motorcycle Sale. What It Means for Harley-Davidson.

It appears Indian Motorcycle was losing Polaris money. (Scott Olson/Getty Images)

Key Points

• Polaris plans to separate its Indian Motorcycle business, selling a majority stake to Carolwood, aiming to improve Ebitda by $50 million annually.
• Indian Motorcycle contributed approximately $478 million, or 7%, of Polaris’ revenues for the trailing twelve-month period ending June 30, 2025.
• Polaris expects third-quarter sales at the high end of $1.6 billion to $1.8 billion, with earnings per share between 31 cents and 41 cents.

The moribund American motorcycle business just got a shot in the arm.

Monday afternoon, powersports-equipment manufacturer Polaris announced plans to separate its Indian Motorcycle business into a standalone company, with private-equity firm Carolwood subsequently buying a majority stake.

The sale is expected to improve Polaris’ earnings before interest, taxes, depreciation, and amortization, or Ebitda, by $50 million a year. Indian Motorcycle appears to have been losing the company money.

“Our first reaction to the news is positive, as Indian has struggled to achieve profitability in a challenging global motorcycle market ever since Polaris acquired it back in 2011,” wrote Raymond James analyst Joseph Altobello on Monday. “Further, it should allow management to better focus its attention and resources on its core powersports businesses.”

Terms of the deal, which is expected to close in the first quarter of 2026, were not disclosed. The company didn’t immediately respond to a request for comment about the deal price. Indian Motorcycle contributed approximately $478 million, or 7%, of Polaris’ revenue for the trailing 12-month period ended June 30, 2025.

“Polaris and Indian Motorcycle both stand to benefit from this deal, which will enable each business to move faster, deliver industry-leading innovation,” said Polaris CEO Mike Speetzen in a news release. “In Carolwood, Indian Motorcycle has a partner that believes in building on the business’s current momentum and supporting its next stage of success.”

Along with the sale, Polaris provided an early look at third-quarter results. The company now expects sales to come in at the high end of its range of $1.6 billion to $1.8 billion, which is better than Wall Street’s projections. Earnings per share should land between 31 cents and 41 cents. Wall Street projects $1.7 billion in sales and a 16-cent per share loss, according to FactSet.

On Tuesday, Polaris gained 13.9%, closing at $69.87. The stock rose 9% on Monday, while the market rallied. The S&P 500 and Dow Jones Industrial Average rose 1.6% and 1.3%, respectively.

Harley-Davidson added 2.8%, closing at $27. The S&P 500 dropped 0.2%.

Shares of both Polaris and motorcycle peer Harley-Davidson have struggled lately. Through Monday trading, Polaris stock was down 24% over the past 12 months. Harley stock was down a similar amount.

Both companies are expected to see declining sales in 2025 compared with 2024. High interest rates have depressed demand for products.

An external valuation for Indian could help Harley shares, too. That, of course, would depend on what Indian Motorcycle is valued at, which hasn’t been disclosed yet.

Harley stock trades for about 10 times estimated 2026 earnings. Polaris stock trades for about 60 times, but the company’s earnings are relatively depressed. Analysts project roughly $1 in 2026 EPS. The company reported EPS of more than $10 in 2022, the company’s best year in recent history.

Write to Al Root at allen.root@dowjones.com