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Allison Transmission (ALSN): Revisiting Valuation After Recent Off-Highway Acquisition and Month-Long Share Price Rebound

Simply Wall St · 1d ago

Allison Transmission Holdings (ALSN) has quietly turned in a solid run lately, with the stock up about 5% over the past week and roughly 14% over the past month, despite a weaker year to date.

See our latest analysis for Allison Transmission Holdings.

That recent 1 month share price return of 14.36% looks more like a sentiment reset than a blip, especially when you set it against a weaker year to date and a still impressive 3 year total shareholder return of 128.35%.

If Allison’s move has you thinking about other industrial names riding defense and infrastructure trends, this could be a good moment to scan aerospace and defense stocks for your next idea.

With revenue and earnings still growing, shares trading below analyst targets, and some models hinting at a deeper intrinsic discount, the key question is whether Allison remains undervalued or whether the market is already pricing in the next leg of growth.

Most Popular Narrative Narrative: 6.5% Undervalued

With Allison Transmission Holdings last closing at $93.72 against a narrative fair value of $100.20, the story leans toward underappreciated earnings power and resilient margins.

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). This is described as supporting both revenue growth and margin enhancement over the next 4 years.

Read the complete narrative.

Curious how a single acquisition, rising electrified platforms, and disciplined capital returns can all feed into one valuation story? Want the full playbook behind that price tag?

Result: Fair Value of $100.2 (UNDERVALUED)

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

However, faster adoption of fully electric drivetrains, along with a deeper and prolonged North American truck downturn, could undercut Allison’s volume assumptions and margin resilience.

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

Build Your Own Allison Transmission Holdings Narrative

If this perspective does not quite match your own, or you prefer to dive into the numbers yourself, you can build a personalized view 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.