Allison Transmission (NYSE:ALSN) Trading Down 5.2% - Here's What Happened

Key Points

• Q1 beat expectations: Allison reported adjusted EPS of $2.57 (vs. $2.10 est.) and revenue of $1.41B (up 83.6% YoY), largely driven by the Off‑Highway acquisition and producing $362M of adjusted EBITDA and $156M of operating cash flow.
• Integration costs sparked caution: Shares fell about 5.2% as investors focused on acquisition-related integration and one-time items that weighed on GAAP profitability, even though management set FY2026 revenue guidance roughly in line with consensus ($5.6B–$5.9B).
• Analyst sentiment is mixed with a consensus "Hold" and a $114.13 target, while the company raised its quarterly dividend to $0.29 (annualized $1.16, ~0.9% yield).

Shares of Allison Transmission Holdings, Inc. (NYSE:ALSN - Get Free Report) traded down 5.2% during trading on Tuesday . The company traded as low as $119.15 and last traded at $122.3140. 171,301 shares were traded during trading, a decline of 80% from the average session volume of 847,114 shares. The stock had previously closed at $129.04.

Key Headlines Impacting Allison Transmission

Here are the key news stories impacting Allison Transmission this week:

• Positive Sentiment: Q1 results beat expectations — Adjusted EPS of $2.57 and revenue of $1.41B topped estimates, showing solid demand and a sizable year-over-year sales jump. This is the primary bullish catalyst supporting valuation. Allison Transmission (ALSN) Q1 Earnings and Revenues Beat Estimates
• Positive Sentiment: Off‑Highway acquisition materially lifted sales — Management attributed most of the revenue gain to the newly acquired Off‑Highway unit, expanding addressable markets and contributing to adjusted EBITDA of $362M (26% margin). This supports medium-term growth expectations. Allison Announces First Quarter 2026 Results
• Positive Sentiment: Strong operating cash flow — Net cash provided by operating activities was $156M in Q1, reinforcing balance-sheet resilience while integrating the acquisition. Allison Announces First Quarter 2026 Results
• Neutral Sentiment: FY2026 revenue guidance set roughly in line with consensus ($5.6B–$5.9B) — range covers analyst expectations but is wide; investors will watch updates as integration progresses. MarketBeat Q1 Coverage
• Neutral Sentiment: Earnings call and slide deck provide detail — Management discussed segment results, integration plans and end‑market momentum; useful for gauging timing of synergies. Allison Q1 2026 Earnings Call Transcript
• Negative Sentiment: Integration costs and margin pressure — Analysts and Zacks flagged acquisition-related integration costs that weighed on GAAP profitability and kept net income modest (net income = 8% of sales), which may temper near-term margin expansion expectations. ALSN Q1 Earnings Beat Estimates on Off-Highway Additions
• Negative Sentiment: One-time and integration items complicate headline metrics — While adjusted results look strong, GAAP EPS and net income dynamics (and any additional acquisition-related costs or leverage) create short-term uncertainty that likely caused profit-taking after the print. MarketBeat Q1 Coverage

Wall Street Analyst Weigh In

A number of analysts recently commented on the stock. Oppenheimer upped their price target on shares of Allison Transmission from $115.00 to $135.00 and gave the company an "outperform" rating in a research note on Tuesday, February 24th. Zacks Research cut shares of Allison Transmission from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, March 24th. Morgan Stanley increased their target price on shares of Allison Transmission from $109.00 to $117.00 and gave the stock an "equal weight" rating in a research note on Monday, March 16th. JPMorgan Chase & Co. increased their target price on shares of Allison Transmission from $87.00 to $115.00 and gave the stock a "neutral" rating in a research note on Wednesday, January 14th. Finally, Wells Fargo & Company increased their target price on shares of Allison Transmission from $98.00 to $127.00 and gave the stock an "equal weight" rating in a research note on Thursday, February 26th. One research analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, six have issued a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus target price of $114.13.

Allison Transmission Stock Down 2.7%

The stock's fifty day moving average price is $121.93 and its 200 day moving average price is $105.82. The stock has a market cap of $10.44 billion, a P/E ratio of 17.13, a price-to-earnings-growth ratio of 0.79 and a beta of 1.01. The company has a current ratio of 4.85, a quick ratio of 4.17 and a debt-to-equity ratio of 1.55.

Allison Transmission (NYSE:ALSN - Get Free Report) last issued its quarterly earnings results on Monday, May 4th. The auto parts company reported $2.57 EPS for the quarter, topping analysts' consensus estimates of $2.10 by $0.47. The firm had revenue of $1.41 billion for the quarter, compared to analyst estimates of $1.38 billion. Allison Transmission had a net margin of 20.70% and a return on equity of 37.41%. The business's revenue for the quarter was up 83.6% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $2.23 EPS. As a group, research analysts forecast that Allison Transmission Holdings, Inc. will post 9.68 earnings per share for the current fiscal year.

Allison Transmission Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, March 20th. Stockholders of record on Monday, March 9th were issued a $0.29 dividend. This represents a $1.16 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date of this dividend was Monday, March 9th. This is a positive change from Allison Transmission's previous quarterly dividend of $0.27. Allison Transmission's payout ratio is currently 15.83%.

Insider Activity at Allison Transmission

In other news, insider Eric C. Scroggins sold 1,313 shares of the stock in a transaction on Monday, March 9th. The shares were sold at an average price of $114.40, for a total value of $150,207.20. Following the transaction, the insider owned 17,654 shares of the company's stock, valued at $2,019,617.60. This represents a 6.92% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. 1.10% of the stock is owned by insiders.

Hedge Funds Weigh In On Allison Transmission

Institutional investors have recently made changes to their positions in the stock. Millstone Evans Group LLC bought a new position in shares of Allison Transmission in the 1st quarter worth $26,000. Cedar Mountain Advisors LLC bought a new position in shares of Allison Transmission during the 1st quarter valued at $27,000. Rossby Financial LCC grew its holdings in shares of Allison Transmission by 107.0% during the 3rd quarter. Rossby Financial LCC now owns 296 shares of the auto parts company's stock valued at $25,000 after purchasing an additional 153 shares during the last quarter. Larson Financial Group LLC grew its holdings in shares of Allison Transmission by 536.7% during the 4th quarter. Larson Financial Group LLC now owns 312 shares of the auto parts company's stock valued at $31,000 after purchasing an additional 263 shares during the last quarter. Finally, Transamerica Financial Advisors LLC grew its holdings in shares of Allison Transmission by 2,112.5% during the 4th quarter. Transamerica Financial Advisors LLC now owns 354 shares of the auto parts company's stock valued at $35,000 after purchasing an additional 338 shares during 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.

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