Allison Transmission Holdings (ALSN): Assessing Value After Recent Share Price Decline and Expansion Move

Allison Transmission Holdings (ALSN) stock has seen fluctuation recently, with shares moving modestly over the past week and month. Investors might be considering the longer term trends and what current valuation levels suggest about future potential.

See our latest analysis for Allison Transmission Holdings.

Allison Transmission Holdings’ share price has cooled off significantly in 2024, reflecting a 22.4% year-to-date decline. While the short-term price return points to subdued momentum, the company’s long-term record still stands out, with a total shareholder return of 139% over five years.

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With shares currently trading well below analyst targets and a strong track record of value creation, the key question for investors is whether Allison Transmission Holdings is undervalued now or if the market has already factored in its potential. Does this set up a buying opportunity, or is future growth fully priced in?

Most Popular Narrative: 18.9% Undervalued

The most widely followed narrative values Allison Transmission Holdings at $103, compared to the last close of $83.58. This substantial gap frames the company as an opportunity whose drivers deserve close attention.

The recently announced acquisition of Dana's Off-Highway business materially expands Allison's global footprint, diversifies its end markets to include agriculture and construction, and is expected to drive significant operational and cost synergies ($120 million annual run rate), supporting both revenue growth and margin enhancement over the next 4 years.

Read the complete narrative.

Curious what lies behind this bullish narrative? What if the key to justifying a high fair value is hidden in bold growth projections and margin bets? The answer may surprise you. Only in the full narrative will the most pivotal assumptions and the tensions behind them be revealed.

Result: Fair Value of $103 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a rapid shift to fully electric drivetrains and prolonged softness in the North America market could challenge Allison Transmission Holdings' current outlook.

Find out about the key risks to this Allison Transmission Holdings narrative.

Build Your Own Allison Transmission Holdings Narrative

If you see things differently or want to dig into the numbers yourself, you can put together your own perspective in just a few minutes, Do it your way

A great starting point for your Allison Transmission Holdings research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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