William Blair Initiates Coverage On Allison Transmission Holdings, Sets $36 Price Target
In a research note released this afternoon, William Blair analyst Lawrence De Maria initiated coverage on Allison Transmission Holdings, Inc. (ALSN) with an Outperform rating and a $36 price target.
“We are initiating coverage of Allison with an Outperform rating, based on the following points: 1) the company carries industry-leading operating margins with strong, consistent free cash ϐlow generation; 2) most of the company’s capital investments are complete, and Allison is in a solid position to beneϐit from them; 3) favorable long-term trends exist for its core product, fully automatic transmission; 4) a gradual cyclical recovery in many of its end-markets is underway or close to occurring; and 5) deleveraging and shareholder return proϐile (dividends and repurchases) are positive for the stock price. Furthermore, Allison’s stock liquidity has improved, and its ϐinancial sponsors will soon completely exit the stock with only 10.6 million shares, or 6%, of private equity common share ownership remaining. This will remove an overhang on the share price. Over time, new products and overseas growth initiatives could contribute to growth amid low expectations”, the analyst wrote.
According to TipRanks, which measures analysts and bloggers success rate based on how their calls perform, analyst Lawrence De Maria currently has a one-year average return of 3.8% and a 53% success rate. He is ranked #1615 out of 3125 analysts.