Whatever the future may look like for Allison Transmission (ALSN)
and its role in a post-electric truck world, the company is executing
remarkably well today. With solid growth in its core North American
truck business augmented by improving demand from energy and mining
applications, as well as share gains in trucks outside North America,
Allison is posting exceptional incremental margins and forcing bearish
sell-siders to trot out “we’re not wrong… we’re just early” calls.
I’m
not in the “the sky is going to fall” camp with Allison, but it’s a
tough story to model out given the likelihood that electric trucks
eventually will grab share in strong core Allison markets like dump
trucks, refuse trucks, and other vocational applications like drayage. I
believe a key question is whether Allison can continue to gain share in
overseas markets (where penetration is low) and whether they can fight
off competition from other transmission alternatives like the Cummins (CMI)/Eaton (ETN) JV.
Read more here:
Allison Transmission Running Over The Bears
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