| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 64 | 20.1x | 17.8x | Around median | |
Growth | 66 | 15.5% | 7.1% | Around median | |
Quality | 85 | 13.4% | 4.5% | Top tier | |
Safety | 49 | 3.5x | 2.6x | Around median | |
Capital Return | 31 | 0.87% | 2.12% | Bottom tier | |
Momentum | 79 | 31.6% | 2.9% | Top tier | |
Sentiment | 41 | 6 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Allison Transmission Holdings operates through two business units: Allison Transmission and Allison Off-Highway, generating revenue from propulsion systems and transmissions used in medium- and heavy-duty trucks, vocational vehicles, tracked and wheeled defense vehicles, as well as construction, material handling, mining, and agricultural equipment. Its portfolio includes the 4500 Specialty Series selected for the PL6T tactical truck program, the 4040 MX for CV90 MkIV vehicles, and the 2500 Specialty Series for EAGLE armored vehicles, linking the company's growth to original equipment manufacturer programs, defense spending, and heavy-equipment market cycles.
In Q2 fiscal 2026, net sales rose 92% year over year to $1.566 billion, driven by the addition of the Allison Off-Highway business unit and 6% growth in the Allison Transmission business unit to a quarterly record of $860 million. Allison Off-Highway contributed $706 million, while defense end-market revenue increased 57% to approximately $100 million, and North America On-Highway end-market revenue rose 3%, primarily supported by pricing.
Adjusted earnings before interest, taxes, depreciation, and amortization reached $404 million in Q2 fiscal 2026, up $91 million year over year, with a margin of 25.8%, while adjusted diluted earnings per share increased 8% to $2.73. Adjusted free cash flow reached a quarterly record of $281 million, up 84%, despite higher steel and aluminum costs and inflationary pressures.
Analyst consensus on ALSN is neutral, with an average price target of $126 and identical high and low targets of $126, indicating the absence of a diverse estimate range on which to rely. The uniform target is approximately 8% below the 52-week range high of $137.62 and approximately 66% above the range low of $76.01. This target balances higher fiscal 2026 guidance, defense strength, and cash flow on the one hand, against material-cost pressure, Allison Off-Highway integration expenses, and seasonality on the other.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Net sales rose 92% year over year to $1.566 billion. The addition of Allison Off-Highway contributed $706 million, while Allison Transmission grew 6% to a quarterly record of $860 million. Within the core unit, defense revenue increased 57% to approximately $100 million, while North America On-Highway end-market revenue rose 3%, primarily supported by pricing.
The 4500 Specialty Series transmission was selected for the PL6T program, which supports more than 7,000 vehicles during the decade following the announcement. Allison also secured a $250 million contract from BAE Hägglunds to supply the 4040 MX for the CV90 MkIV vehicle, the largest tracked-defense order in the company's history. An order from General Dynamics European Land Systems added approximately 3,000 EAGLE vehicles, with an option for up to 2,000 more units and deliveries beginning in 2027.
The company expects net sales of between $5.8 billion and $6.0 billion and net income of between $600 million and $700 million in fiscal 2026. Adjusted earnings before interest, taxes, depreciation, and amortization are expected to range between $1.465 billion and $1.575 billion, equivalent to a margin of approximately 26% at the midpoint. It also expects adjusted free cash flow of between $745 million and $865 million, after anticipated capital expenditures of between $260 million and $280 million.
Automated analysis for informational purposes only — not investment advice.
Allison is targeting $120 million in annual savings at full run rate, with 60% representing opportunities in procurement and logistics and 20% representing improvements in manufacturing and the operational footprint. The company plans to achieve 40% of the target by the end of 2027, an additional 40% by the end of 2028, and the full amount by the end of 2029. Fiscal 2026 adjusted earnings guidance did not include material savings, so the increase primarily came from higher volumes and operating cost management.
Higher steel and aluminum costs pressured the Allison Transmission business unit's margin in Q2 fiscal 2026, and aluminum prices rose approximately 25% quarter over quarter. The company can recover a substantial portion of higher commodity costs through pricing mechanisms, but this occurs after a lag of between 6 and 12 months. Meanwhile, the consolidated adjusted earnings before interest, taxes, depreciation, and amortization margin was 25.8%, compared with approximately 26% at the midpoint of fiscal 2026 guidance.
Management stated that Q3 is seasonally the weakest quarter for Allison Off-Highway and that approximately half of its business comes from Europe, where summer shutdowns affect production. It also expected Q4 to improve from Q3 but remain below the first-half fiscal 2026 level due to year-end holidays. In addition to seasonality, the agricultural market had not shown a positive turn as of Q2 fiscal 2026, and the Americas business declined year over year in construction, material handling, and agriculture.
