UPDATE: Credit Suisse Downgrades Allison Transmission (ALSN) to Neutral

(Updated - February 22, 2022 4:19 AM EST)

Credit Suisse analyst Jamie Cook downgraded Allison Transmission (NYSE: ALSN) from Outperform to Neutral with a price target of $48.00.

The analyst comments "Reducing Rating to Neutral from Outperform. We believe the market appropriately recognizes ALSN as a high quality industrial with above average margins and returns, as well as the strong cash flow generation. However, with the stock up 12% year to date and more limited upside to our target price, we reduce our rating to Neutral from Outperform. While We Are Positive on Truck Cycle; Our Preferred Truck Names are CMI and PCAR. We continue to believe supply chain disruption and continued strength in trucker profitability has extended the truck cycle through 2023 with an opportunity for a pre-buy ahead of the CARB 2024 emissions standards driving potential upside to 2023 production forecasts. We prefer CMI and PCAR as our top truck companies given market outgrowth and margin improvement stories. Furthermore, ALSN typically underperforms truck names like PCAR and CMI in a truck upcycle viewed as more defensive. Allison has limited exposure to the class 8 line haul market more so in medium duty, which is less cyclical as well as vocational class 8."

For an analyst ratings summary and ratings history on Allison Transmission click here. For more ratings news on Allison Transmission click here.

Shares of Allison Transmission closed at $40.57 yesterday.

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