Neutral at Stop Tech Becoming Standard Could Be a Game Changer for Allison Transmission (ALSN)

• Allison Transmission recently announced that its Neutral at Stop fuel-saving technology is now standard on Kenworth and Peterbilt models equipped with the Allison 4700 Rugged Duty Series™ transmissions, targeting enhanced fuel efficiency in commercial fleets.
• This move is expected to deliver direct operational benefits for urban and stop-start fleet operators, supporting lower fuel consumption and advancing sustainability goals within the industry.
• We'll examine how the standardization of Allison’s Neutral at Stop feature supports its investment narrative around fleet efficiency and innovation.

These 10 companies survived and thrived after COVID and have the right ingredients to survive Trump's tariffs. Discover why before your portfolio feels the trade war pinch.

Allison Transmission Holdings Investment Narrative Recap

To be a shareholder in Allison Transmission Holdings, you likely need conviction in the company’s ability to innovate in transmission technology, drive operational savings for its customers, and adapt to shifting vehicle powertrain preferences. The standardization of Neutral at Stop on key Kenworth and Peterbilt models is aligned with Allison's focus on fleet efficiency and could help mitigate near-term risks tied to softening North America On-Highway demand by bolstering value for urban fleet operators; however, this development does not materially change the greatest short-term catalyst or largest risk, which remain the Dana Off-Highway acquisition and ongoing OEM order softness, respectively. The recent inclusion of Allison's Neutral at Stop feature as a standard offering stands out among recent product-related announcements, as it directly ties to the company’s core themes of efficiency and cost savings for commercial fleets. While other announcements, like the acquisition of Dana’s Off-Highway business, expand Allison’s end market exposure, enhancements like Neutral at Stop are practical responses to customer needs, particularly in urban delivery and refuse segments that are pivotal amid current OEM market pressures. But it's also important to keep in mind that even as efficiency features like Neutral at Stop are being rolled out, the pressure from a potential slowdown in North America On-Highway demand remains an underlying issue that investors should be aware of...

Read the full narrative on Allison Transmission Holdings (it's free!)

Allison Transmission Holdings is projected to reach $5.1 billion in revenue and $983.8 million in earnings by 2028. This outlook is based on an annual revenue growth rate of 16.9% and an earnings increase of $221.8 million from the current $762.0 million.

Uncover how Allison Transmission Holdings' forecasts yield a $104.89 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Six members of the Simply Wall St Community placed fair value estimates for Allison ranging widely from US$80.18 to US$241.58. While many see future earnings growth and new product rollouts as supporting factors, continuing softness in core truck markets remains a key issue for performance, urging you to weigh several perspectives before forming your view.

Explore 6 other fair value estimates on Allison Transmission Holdings - why the stock might be worth over 2x more than the current price!

Build Your Own Allison Transmission Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Allison Transmission Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Allison Transmission Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Allison Transmission Holdings' overall financial health at a glance.

No Opportunity In Allison Transmission Holdings?

Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped:

• Uncover the next big thing with financially sound penny stocks that balance risk and reward.
• The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 24 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement.
• Explore 24 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com