- Allison did a little better than expected in the second quarter, but cost headwinds are real and there is near-term uncertainty on truck production schedules from the global chip shortage.
- The biggest unknown remains EV strategic positioning, with arguments ranging from electrification creating new market opportunities in linehaul to significantly sapping Allison's future market share and margins.
- Allison looks undervalued enough on a DCF and multiples-based approach to be worth a look, but it's a higher-risk name due to those EV uncertainties.
For further details see:
Allison Transmission Doesn't Look Expensive, But Uncertainties Are Everywhere