Citi has updated its financial outlook for Allison Transmission (NYSE: ALSN), lifting the price target from the previous $97.00 to $109.00 while maintaining a Neutral rating on the stock.
The revision reflects an increased adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) forecast for the company, citing stronger than expected North American on-highway revenue.
The firm's revised estimates place Allison Transmission's 2024 adjusted EBITDA at $1,147 million, which is higher than the company's own guidance range of $1,085 million to $1,145 million.
The new projection is based on an anticipated increase in revenue from the North American on-highway sector. Similarly, the 2025 adjusted EBITDA estimate has been raised to $1,226 million from $1,196 million, primarily due to expectations of higher pricing and margins in the North American On-Highway segment.
Citi also adjusted its 2026 adjusted EBITDA forecast for Allison Transmission upwards to $1,319 million from the prior estimate of $1,294 million. This increase is largely attributed to expectations of improved margins.
The firm's earnings per share (EPS) estimates for the company saw a modest uptick as well. The 2024 EPS estimate is now set at $8.00, rising from $7.95, while the 2025 EPS forecast has increased to $9.30 from $9.10. The 2026 EPS estimate has been slightly adjusted to $10.75 from $10.70.
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