Narrative Update: Allison Transmission Holdings Analyst Price Target Adjusted
Analysts have lowered their fair value estimate for Allison Transmission Holdings from $104.89 to $103.00. This change reflects adjustments to growth projections and valuation assumptions.
What's in the News
- Allison Transmission awarded a $97 million contract to support the U.S. Army's Abrams Main Battle Tank program, reinforcing the X1100 transmission's longstanding reliability and performance.
- Successful integration of Allison's 4500 RDS automatic transmission with the Cummins X15N natural gas engine in Kenworth T880 tractors. This marks a significant advance in sustainable heavy-duty transportation.
- North American Class 8 truck orders fell 32% year-over-year in September, with Allison highlighted among key industry players (Bloomberg).
- Neutral at Stop fuel saving technology, now standard on Kenworth and Peterbilt models with the Allison 4700 RDS transmission, is designed to improve efficiency and lower operating costs for commercial fleets.
- Revision of 2025 earnings guidance, with expected net sales between $3,075 million and $3,175 million and net income projected in the $640 million to $680 million range.
Valuation Changes
- The Fair Value Estimate has fallen slightly from $104.89 to $103.00.
- The Discount Rate has increased marginally from 8.74% to 8.98%.
- The Revenue Growth Projection has decreased significantly from 16.90% to 10.00%.
- The Net Profit Margin is expected to rise from 19.24% to 21.10%.
- The Future P/E Ratio has increased from 10.28x to 11.12x.
Disclaimer
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