Allison Transmission (ALSN) is positioned to serve domestic and global clients despite macro uncertainty, given its favorable North America exposure and domestic material sourcing, Oppenheimer reported in a Thursday research report.
The Q1 earnings beat was driven by robust gross margin improvement and price increases, the brokerage noted.
The decline in global off-highway and service parts revenue due to demand slump from energy, mining, and construction sectors was partly offset by on-highway sales growth in North American markets, analysts noted.
The company sees strong vocational truck demand in North American markets as medium-duty truck volume remains in line with estimates.
The brokerage said it adjusted 2025 and 2026 earnings before interest, taxes, depreciation, and amortization estimates to $1.19 billion and $1.23 billion from $1.20 billion and $1.25 billion earlier based on North American on-highway and global off-highway assumptions.
Oppenheimer retained its outperform rating on the stock and had a 12-month price target of $115 per share.
Shares were up nearly 5% in recent trading.
Price: 97.85, Change: +4.46, Percent Change: +4.77
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