Allison Transmission Holdings (ALSN) has drawn fresh attention after its recent trading move, with the stock closing at US$119.76. Investors are weighing this price against the company’s financial profile and recent return history.
In the short term, the share price has been under pressure, with a 7 day share price return of down 6.1% and a 30 day share price return of down 4.5%. However, Allison Transmission Holdings still carries a 1 year total shareholder return of 35.9%, which points to momentum that has been stronger over a longer stretch than in recent weeks.
Scan Allison Transmission Holdings alongside a hand picked group of industrial players with strong recent share price trends and resilient fundamentals using our list of solid balance sheet and fundamentals (23 results).
Allison Transmission Holdings now trades at a sizeable discount to both analyst targets and an estimated fair value, even after its recent pullback. Is the market being sensibly cautious, or is it leaving too much on the table?
Most Popular Narrative: 14% Undervalued
On the most followed view, Allison Transmission Holdings screens as undervalued, with a fair value estimate of $139.40 against the recent $119.76 close, and that gap is being linked directly to how its off highway and electrified businesses evolve.
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.
See why 22 investors see Allison Transmission Holdings as 14% undervalued.
Result: Fair Value of $139.40 (UNDERVALUED)
Still, investors in Allison Transmission Holdings need to watch two pressure points closely: faster adoption of fully electric drivetrains and any stumble integrating Dana's Off Highway unit.
Find out about the key risks to this Allison Transmission Holdings narrative.
Next Steps
Mixed signals around Allison Transmission Holdings can feel confusing, so move quickly, pull up the full data set, and weigh both sides using the 3 key rewards and 2 important warning signs.
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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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