ALSN changes
Pick any two versions below to diff them.
- Price
- $111.80 → $110.94(−0.8%)
- Discount
- 9% to 33% → 10% to 34%(+1.0 pts)
- Next earnings
- 2026-11-03 → 2026-11-02
- Next earnings is estimate
- Yes → No
- Thesis
- The market prices Allison for the risk of a downturn in truck demand and for the cost of its large purchase. North American truck sales move in cycles, and electric vehicles may need fewer conventional transmissions in the long term. The Off-Highway purchase added debt: total debt was $4.11 billion and net debt $3.72 billion at June 30, 2026. The new business also has a much lower margin than the legacy business, and its farm market has not recovered yet. Allison expects about $140 million of one-time costs in 2026 for the separation, integration and restructuring of Off-Highway. For the gap to close, three things must be true. Allison must reach its raised 2026 guidance of adjusted EBITDA of $1,465 million to $1,575 million and adjusted free cash flow of $745 million to $865 million. The Off-Highway margin must rise as Allison captures the planned synergies. Free cash flow must keep lowering net debt toward the company's leverage target. The Q3 2026 report, estimated for about on November 32, 2026, is the next test. The 2027 guidance in February 2027 is the main test. If these checks pass, the gap can close over the next three to six quarters. The main reason it may not close is a fall in North American truck demand, which drives most of the legacy profit.
- Checkpoints
- Nov 32, 2026 (estimate): Q3 2026 earnings: truck demand and Off-Highway margin. Pending. Watch: Results on track for the raised 2026 guidance and a higher Off-Highway margin than the 15% of Q2 pass; a cut to the guidance fails. Feb 2027 (estimate): 2027 guidance: synergies and debt. Pending. Watch: 2027 guidance for higher adjusted EBITDA and lower net debt passes; guidance for lower adjusted EBITDA because of weaker truck demand fails.
- Recent events
- 2026-10-19: Allison said that it will report Q3 2026 results after the market closes on November 2, 2026, with a call at 5:00 p.m. Eastern Time. 2026-08-03: Allison reported Q2 2026 results. Net sales rose 92% to $1,566 million with the Off-Highway business. Diluted EPS was $2.15 and adjusted diluted EPS was $2.73, up 8%. Adjusted EBITDA rose 29% to $404 million, and adjusted free cash flow was a record $281 million. Allison repaid the remaining $150 million on its revolver and raised its 2026 guidance. 2026-06-11: Allison refinanced about $508 million of term loans due March 13, 2031, and lowered the interest margin on these loans by 0.25%. 2026-02-23: Allison reported 2025 results. Net sales were $3 billion, net income was $623 million and adjusted EBITDA was $1,130 million, or 37.5% of net sales. Defense net sales rose 26% to $267 million. 2026-01-02: Allison completed the purchase of Dana's Off-Highway business for $2.732 billion. To pay for it, Allison added a $1.2 billion term loan due 2033 and increased its revolving credit facility to $1 billion, now due January 2, 2031. Craig M. Price, the former head of Dana's Off-Highway business, became President of Allison Off-Highway.