We’ve grown more optimistic on Allison Transmission's near-term sales and margin prospects. We forecast sales to increase by 3% in 2024, thanks to solid demand across the company's end markets. We expect adjusted operating margin to come in at 30.4% this year, 10 basis points above 2023 levels. We have increased our fair value estimate to $84 per share from $79.
Allison leverages its strong brand to penetrate emerging markets with its fully automatic transmissions, substantially boosting sales.
Local competitors prove to be stronger than expected, leaving Allison with limited market share opportunities abroad.
|
Metric
|
ALSN
|
CMI
|
PCAR
|
|---|---|---|---|
Price/Earnings (Normalized) | 9.73 | 14.92 | 11.00 |
Price/Book Value | 4.90 | 4.31 | 3.29 |
Price/Sales | 2.20 | 1.20 | 1.57 |
Price/Cash Flow | 8.01 | 27.06 | 9.58 |
|
Metric
|
ALSN
|
CMI
|
PCAR
|
|---|---|---|---|
Quick Ratio | 1.82 | 0.65 | 2.41 |
Current Ratio | 2.50 | 1.18 | 2.70 |
Interest Coverage | 8.73 | 4.70 | — |
|
Metric
|
ALSN
|
CMI
|
PCAR
|
|---|---|---|---|
Return on Assets (Normalized) | 14.14% | 3.38% | 13.26% |
Return on Equity (Normalized) | 60.30% | 11.08% | 32.56% |
Return on Invested Capital (Normalized) | 21.52% | 6.47% | 17.39% |
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Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
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