Zacks Research Downgrades Allison Transmission (NYSE:ALSN) to Strong Sell

Key Points

• Zacks Research has downgraded Allison Transmission from a "hold" rating to a "strong sell" rating, reflecting concerns about the company's performance.
• The stock's price objective has been adjusted by several analysts, with Citigroup lowering it from $105.00 to $100.00 while Goldman Sachs raised its target from $80.00 to $90.00, indicating mixed analyst sentiment.
• Allison Transmission reported a quarterly EPS of $2.29, beating estimates, but its revenue declined by 0.2% year-over-year, raising questions about future growth.

Zacks Research cut shares of Allison Transmission (NYSE:ALSN - Free Report) from a hold rating to a strong sell rating in a research note published on Tuesday,Zacks.com reports.

A number of other brokerages have also recently weighed in on ALSN. Bank of America raised their price target on Allison Transmission from $74.00 to $79.00 and gave the company an "underperform" rating in a research report on Monday, June 16th. Wall Street Zen cut Allison Transmission from a "buy" rating to a "hold" rating in a research report on Sunday, June 22nd. Raymond James Financial reduced their price objective on Allison Transmission from $110.00 to $105.00 and set an "outperform" rating on the stock in a research report on Monday, July 21st. Citigroup reduced their price objective on Allison Transmission from $105.00 to $100.00 and set a "neutral" rating on the stock in a research report on Tuesday, June 24th. Finally, Morgan Stanley upped their target price on shares of Allison Transmission from $94.00 to $100.00 and gave the company an "equal weight" rating in a report on Tuesday, May 6th. Two research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and three have assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, Allison Transmission presently has a consensus rating of "Reduce" and a consensus target price of $98.38.

Allison Transmission Stock Performance

Allison Transmission stock traded down $0.96 during trading hours on Tuesday, reaching $88.35. 556,853 shares of the stock were exchanged, compared to its average volume of 805,603. The stock has a market cap of $7.39 billion, a P/E ratio of 10.04 and a beta of 0.97. The company has a debt-to-equity ratio of 1.37, a quick ratio of 2.64 and a current ratio of 3.36. Allison Transmission has a 52-week low of $80.39 and a 52-week high of $122.53. The firm's 50 day moving average is $90.71 and its 200 day moving average is $95.59.

Allison Transmission (NYSE:ALSN - Get Free Report) last issued its earnings results on Monday, August 4th. The auto parts company reported $2.29 EPS for the quarter, topping the consensus estimate of $2.20 by $0.09. The company had revenue of $814.00 million for the quarter, compared to analyst estimates of $811.05 million. Allison Transmission had a net margin of 23.81% and a return on equity of 45.56%. The business's revenue was down .2% on a year-over-year basis. During the same period in the previous year, the firm earned $2.13 EPS. Allison Transmission has set its FY 2025 guidance at EPS. Analysts predict that Allison Transmission will post 9.06 EPS for the current fiscal year.

Allison Transmission Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, August 29th. Investors of record on Wednesday, August 20th will be given a dividend of $0.27 per share. This represents a $1.08 dividend on an annualized basis and a yield of 1.2%. The ex-dividend date of this dividend is Wednesday, August 20th. Allison Transmission's dividend payout ratio is 12.27%.

Hedge Funds Weigh In On Allison Transmission

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Thompson Davis & CO. Inc. acquired a new stake in Allison Transmission during the second quarter valued at approximately $1,406,000. Coppell Advisory Solutions LLC raised its stake in Allison Transmission by 82.1% during the second quarter. Coppell Advisory Solutions LLC now owns 39,148 shares of the auto parts company's stock valued at $3,706,000 after buying an additional 17,651 shares in the last quarter. State of Wyoming raised its stake in Allison Transmission by 9.5% during the second quarter. State of Wyoming now owns 3,401 shares of the auto parts company's stock valued at $323,000 after buying an additional 294 shares in the last quarter. Caxton Associates LLP raised its stake in Allison Transmission by 84.3% during the second quarter. Caxton Associates LLP now owns 23,339 shares of the auto parts company's stock valued at $2,217,000 after buying an additional 10,672 shares in the last quarter. Finally, Public Sector Pension Investment Board raised its stake in Allison Transmission by 0.8% during the second quarter. Public Sector Pension Investment Board now owns 83,299 shares of the auto parts company's stock valued at $7,913,000 after buying an additional 641 shares in the last quarter. 96.90% of the stock is owned by hedge funds and other institutional investors.

About Allison Transmission

Allison Transmission Holdings, Inc, together with its subsidiaries, designs, manufactures, and sells fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. It provides commercial-duty on-highway, off-highway and defense fully automatic transmissions, and electric hybrid and fully electric systems.