Allison Transmission (NYSE:ALSN) Announces Quarterly Earnings Results, Beats Estimates By $0.25 EPS

Allison Transmission (NYSE:ALSN) posted its earnings results on Monday. The auto parts company reported $2.73 EPS for the quarter, topping analysts’ consensus estimates of $2.48 by $0.25, FiscalAI reports. Allison Transmission had a return on equity of 37.50% and a net margin of 14.88%.The company had revenue of $1.57 billion for the quarter, compared to the consensus estimate of $1.50 billion. During the same period in the previous year, the business earned $2.29 earnings per share. Allison Transmission’s quarterly revenue was up 92.4% compared to the same quarter last year.

Here are the key takeaways from Allison Transmission’s conference call:

• Second-quarter performance was strong: net sales rose 92% year over year to $1.566 billion, adjusted EBITDA increased to $404 million with a 25.8% margin, adjusted EPS rose 8% to $2.73, and adjusted free cash flow reached a record $281 million.
• Allison raised its 2026 guidance, now expecting revenue of $5.8 billion–$6.0 billion, adjusted EBITDA of $1.465 billion–$1.575 billion, and adjusted free cash flow of $745 million–$865 million. Management said the increase is primarily driven by a stronger outlook for the legacy transmission business, while the Off-Highway outlook is broadly unchanged.
• Defense momentum remains substantial, including a $250 million CV90 Mark 4 transmission contract, a French tactical truck award covering more than 7,000 vehicles, and an order for approximately 3,000 EAGLE armored vehicles with an option for 2,000 more. Management described defense demand and visibility into 2027 as highly favorable.
• The company outlined a $120 million annual run-rate synergy target from the Off-Highway integration, focused mainly on procurement and logistics, manufacturing optimization, and corporate efficiencies. Allison expects to realize approximately 40% by the end of 2027, another 40% by the end of 2028, and the full amount by the end of 2029, with potential upside beyond the current target.
• Legacy-business margins faced significant steel and aluminum inflation, including mid-teens year-over-year material-cost headwinds and a roughly 25% sequential increase in aluminum costs. Pricing and contractual recovery mechanisms are expected to offset much of the pressure, but with a six- to 12-month lag; agriculture demand in Off-Highway also remains weak and the business faces normal third-quarter seasonality.

Allison Transmission Stock Performance

Shares of ALSN opened at $116.33 on Tuesday. The firm has a fifty day moving average of $116.68 and a 200-day moving average of $117.93. The company has a market cap of $9.65 billion, a price-to-earnings ratio of 18.09, a price-to-earnings-growth ratio of 0.63 and a beta of 0.95. The company has a debt-to-equity ratio of 2.23, a quick ratio of 1.18 and a current ratio of 1.85. Allison Transmission has a 1 year low of $76.01 and a 1 year high of $137.62.

Allison Transmission Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, May 29th. Stockholders of record on Monday, May 18th were issued a dividend of $0.29 per share. The ex-dividend date of this dividend was Monday, May 18th. This represents a $1.16 annualized dividend and a dividend yield of 1.0%. Allison Transmission’s dividend payout ratio is 18.04%.

Wall Street Analysts Forecast Growth

Several research firms have weighed in on ALSN. JPMorgan Chase & Co. raised their target price on shares of Allison Transmission from $140.00 to $145.00 and gave the company a “neutral” rating in a report on Monday, July 13th. Wells Fargo & Company lifted their price objective on Allison Transmission from $127.00 to $137.00 and gave the stock an “equal weight” rating in a research report on Wednesday, May 6th. Citigroup reduced their target price on shares of Allison Transmission from $135.00 to $125.00 and set a “neutral” rating on the stock in a report on Tuesday, July 14th. Weiss Ratings cut shares of Allison Transmission from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Thursday, July 16th. Finally, Morgan Stanley boosted their price objective on shares of Allison Transmission from $126.00 to $130.00 and gave the company an “equal weight” rating in a research report on Friday, July 17th. One research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and six have issued a Hold rating to the company’s stock. According to data from MarketBeat, Allison Transmission presently has a consensus rating of “Hold” and an average target price of $131.17.

Insider Buying and Selling

In other Allison Transmission news, CFO Scott A. Mell sold 2,270 shares of the firm’s stock in a transaction that occurred on Friday, May 8th. The shares were sold at an average price of $125.00, for a total value of $283,750.00. Following the sale, the chief financial officer owned 1,053 shares in the company, valued at approximately $131,625. This trade represents a 68.31% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Company insiders own 1.10% of the company’s stock.

Institutional Trading of Allison Transmission

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Transamerica Financial Advisors LLC lifted its holdings in Allison Transmission by 2,112.5% in the 4th quarter. Transamerica Financial Advisors LLC now owns 354 shares of the auto parts company’s stock valued at $35,000 after acquiring an additional 338 shares during the last quarter. Advisory Services Network LLC acquired a new stake in Allison Transmission during the third quarter valued at approximately $61,000. EverSource Wealth Advisors LLC boosted its holdings in Allison Transmission by 441.5% during the second quarter. EverSource Wealth Advisors LLC now owns 1,018 shares of the auto parts company’s stock worth $97,000 after buying an additional 830 shares in the last quarter. New Vernon Capital Holdings II LLC purchased a new stake in shares of Allison Transmission during the third quarter valued at $156,000. Finally, Smartleaf Asset Management LLC increased its stake in Allison Transmission by 102.2% in the 2nd quarter. Smartleaf Asset Management LLC now owns 1,763 shares of the auto parts company’s stock worth $167,000 after purchasing an additional 891 shares in the last quarter. Institutional investors own 96.90% of the company’s stock.

Allison Transmission Company Profile

Allison Transmission Holdings Inc is a global designer, manufacturer and seller of fully automatic transmissions and hybrid propulsion systems for commercial duty vehicles and off-highway equipment. The company’s products are engineered to improve fuel efficiency, reduce emissions and enhance performance across a broad range of industries. Allison’s core transmission portfolio serves applications such as on-highway trucks and buses, medium- and heavy-duty commercial vehicles, and military ground vehicles.

In addition to conventional automatic transmissions, Allison offers advanced hybrid systems that integrate electric motors with mechanical transmission components.