Allison Transmission Seeing Healthy Demand Today, But The Future Remains The Major Debate

Despite stronger near-term results, the “now versus then” debate on Allison Transmission (NYSE:ALSN) won’t go away, as analysts and investors continue to argue over the adoption curve of electrified trucks, what role Allison will play in electrified vehicles, and what the profitability of that role may be. In the meantime, Allison is looking forward to multiple potential growth drivers in its established business, but also faces the prospect of further cost ramps for electrification-related R&D.

I liked these shares back in August of 2021, and the stock has done alright since then – rising close to 10% and roughly doubling the return of the market, while also outperforming other commercial truck suppliers like American Axle (AXL), Cummins (CMI), and Dana (DAN). The valuation now is more “good” than “compelling”, and I’d lean more toward other names like Dana, but that’s largely splitting hairs.

 

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Allison Transmission Seeing Healthy Demand Today, But The Future Remains The Major Debate