Moving Allison Transmission (ALSN) to Sell
Today we are moving shares of Allison Transmission (ALSN) from Hold to Sell. The strong earnings report and encouraging 2024 outlook drove the shares upward to 70, well above our prior 59 price target. Even when updating our model with optimistic assumptions, the shares look fully valued at 70.
Allison remains a fundamentally strong company with a valuable market position, healthy profits and robust free cash flow, backed by a solid balance sheet. The management team is among the best in the industrial sector for its operational oversight and shareholder-friendly philosophy. We would readily repurchase shares at lower prices.
We estimate that the total return since February 23, 2022 inception is approximately 82%. This compares to an estimated 22% total return for the S&P 500 Index over the same period.
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