Allison Transmission (NYSE:ALSN) Shares Climb 3.8% - What's Next?

Key Points

• Allison Transmission shares rose 3.8% to about $114 during mid-day trading, though volume was 89% below the average session level.
• Analyst sentiment is broadly positive, with a “Moderate Buy” consensus and an average price target of $131.57; recent upgrades included Citigroup and Weiss Ratings.
• The company beat quarterly expectations with $2.73 in EPS and $1.57 billion in revenue, while maintaining a $0.29 quarterly dividend and attracting significant institutional ownership.

Allison Transmission Holdings, Inc. (NYSE:ALSN - Get Free Report)'s stock price rose 3.8% during mid-day trading on Monday. The stock traded as high as $114.03 and last traded at $114.0240. 104,703 shares changed hands during mid-day trading, a decline of 89% from the average session volume of 934,790 shares. The stock had previously closed at $109.86.

Analyst Ratings Changes

A number of analysts have issued reports on ALSN shares. Weiss Ratings raised Allison Transmission from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Tuesday, August 11th. Citigroup upgraded Allison Transmission from a "neutral" rating to a "buy" rating and set a $135.00 price target on the stock in a report on Monday. JPMorgan Chase & Co. lowered their price target on shares of Allison Transmission from $145.00 to $142.00 and set a "neutral" rating on the stock in a research report on Thursday. Wells Fargo & Company dropped their price objective on shares of Allison Transmission from $137.00 to $120.00 and set an "equal weight" rating for the company in a report on Thursday. Finally, Freedom Broker started coverage on shares of Allison Transmission in a report on Friday, October 2nd. They issued a "buy" rating and a $144.00 price objective for the company. Two analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and three have assigned a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $131.57.

Allison Transmission Trading Up 3.5%

The stock has a market cap of $9.39 billion, a PE ratio of 18.08, a price-to-earnings-growth ratio of 0.58 and a beta of 0.98. The company has a debt-to-equity ratio of 2.07, a quick ratio of 1.17 and a current ratio of 1.81. The company's 50-day moving average price is $121.90 and its 200 day moving average price is $120.27.

Allison Transmission (NYSE:ALSN - Get Free Report) last released its quarterly earnings data on Monday, August 3rd. The auto parts company reported $2.73 EPS for the quarter, beating analysts' consensus estimates of $2.48 by $0.25. The firm had revenue of $1.57 billion for the quarter, compared to analysts' expectations of $1.50 billion. Allison Transmission had a return on equity of 38.18% and a net margin of 12.02%. The firm's quarterly revenue was up 92.4% on a year-over-year basis. During the same period in the prior year, the firm posted $2.29 earnings per share. On average, sell-side analysts forecast that Allison Transmission Holdings, Inc. will post 10.25 EPS for the current fiscal year.

Allison Transmission Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Monday, August 31st. Shareholders of record on Friday, August 21st were given a $0.29 dividend. The ex-dividend date was Friday, August 21st. This represents a $1.16 dividend on an annualized basis and a yield of 1.0%. Allison Transmission's payout ratio is currently 18.44%.

Insiders Place Their Bets

In other news, CEO David Graziosi sold 26,708 shares of the company's stock in a transaction on Friday, August 21st. The stock was sold at an average price of $132.97, for a total value of $3,551,362.76. Following the transaction, the chief executive officer owned 304,843 shares of the company's stock, valued at $40,534,973.71. This represents a 8.06% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Eric Scroggins sold 1,050 shares of the stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $125.00, for a total value of $131,250.00. Following the transaction, the insider owned 16,604 shares of the company's stock, valued at approximately $2,075,500. This represents a 5.95% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 1.10% of the stock is owned by insiders.

Institutional Trading of Allison Transmission

Institutional investors and hedge funds have recently bought and sold shares of the stock. BlackRock Inc. acquired a new stake in Allison Transmission in the 2nd quarter valued at approximately $448,232,000. First Trust Advisors LP raised its position in Allison Transmission by 85.2% in the first quarter. First Trust Advisors LP now owns 2,026,603 shares of the auto parts company's stock valued at $237,234,000 after purchasing an additional 932,201 shares during the period. Wasatch Advisors LP raised its position in Allison Transmission by 105.7% in the second quarter. Wasatch Advisors LP now owns 1,510,496 shares of the auto parts company's stock valued at $170,293,000 after purchasing an additional 776,169 shares during the period. Stockbridge Partners LLC purchased a new stake in Allison Transmission in the second quarter valued at approximately $169,108,000. Finally, Bank of America Corp DE lifted its stake in Allison Transmission by 12.3% during the first quarter. Bank of America Corp DE now owns 1,100,162 shares of the auto parts company's stock worth $128,785,000 after purchasing an additional 120,335 shares in the last quarter. 96.90% of the stock is currently owned by hedge funds and other institutional investors.

Allison Transmission Company Profile

Allison Transmission Holdings, Inc designs and manufactures fully automatic transmissions and propulsion solutions for commercial and defense vehicles. Its products are used in a broad range of applications, including refuse and construction trucks, buses, distribution vehicles, emergency vehicles, motorhomes, and off-highway equipment.

The company's portfolio includes conventional automatic transmissions, hybrid-electric propulsion systems, and electric axles and other solutions intended to support vehicle electrification.

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