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ALSN · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is Allison Transmission Holdings, Inc. (ALSN) stock moving?
Allison reported a strong Q3 2026 on Nov 2. Net sales of $1,534M beat the $1,473M estimate, adjusted EPS of $2.90 beat $2.23, and adjusted EBITDA margin was 26.1%. Allison Transmission's record $881M in sales was up 27% year over year, and demand for medium-duty and Class 8 vocational trucks accelerated. Full-year 2026 sales guidance was raised to $5.975B-$6.075B, above the $5.933B consensus, and cash generation was strong, with adjusted free cash flow of $278M and over $400M of debt repaid year to date. The main weak spot is Industrial and Agriculture demand, which the company says is still subdued by geopolitical developments. Analysts followed the results: Citigroup kept a Buy and raised its target to $140, while Morgan Stanley stayed Equal-Weight and raised its target to $139. Market data supports the results story. The stock rose from $108.05 on Oct 30 to $113.09 on Nov 2, on volume of about 1.31M versus a prior average near 650K. It reached $125.56 on Nov 10, a new high in the 30-day range, after a pullback to about $116 that held. The stock is now close to the Morgan Stanley target and about 11% below Citigroup's, so the easy re-rating after earnings may be largely priced in. The Nov 10 analyst teach-in was a further positive, outlining long-term drivers such as data centers, defense and mining, along with bolt-on M&A plans.
News behind the analysis
- Allison Announces Third Quarter 2026 ResultsQ3 net sales reached $1,534M, with Allison Transmission's record $881M, and adjusted diluted EPS of $2.90 up 59% year over year. Full-year 2026 revenue, earnings and cash flow guidance was raised for the second straight quarter.
- Allison Transmission Q3 EPS $2.90 Beats $2.23 Estimate, Sales $1.534B Beat $1.473B EstimateAdjusted EPS and sales both came in above consensus. The beat was reported on Nov 2.
- Allison Transmission Raises FY2026 Sales Guidance from $5.800B-$6.000B to $5.975B-$6.075B vs $5.933B EstThe full-year 2026 sales range was lifted and now sits above the $5.933B consensus estimate. The new midpoint is about $6.025B.
- Allison Transmission CEO Says Medium-Duty, Class 8 Vocational Truck Demand Accelerated; Industrial, Agriculture Demand Subdued On Geopolitical DevelopmentsThe CEO said demand for medium-duty and Class 8 vocational trucks accelerated, while Industrial and Agriculture demand stayed subdued due to geopolitical developments. Mining and Construction & Material Handling were stronger in Off-Highway.
- Allison Transmission Q3 2026 Earnings Call TranscriptThe full transcript of the third-quarter 2026 earnings call is available. It covers the results, guidance raise and end-market commentary.
- Citigroup Maintains Buy on Allison Transmission, Raises Price Target to $140Citigroup kept its Buy rating and raised its price target to $140. That target is about 11% above the Nov 10 close of $125.56.
- Morgan Stanley Maintains Equal-Weight on Allison Transmission, Raises Price Target to $139Morgan Stanley kept an Equal-Weight rating and raised its price target from $132 to $139. The target sits close to the current share price, which limits implied upside.
- Allison Transmission Named Supplier of the Year by IdealeaseAllison was recognized as the 2026 Supplier of the Year by Idealease, a major commercial truck leasing and rental company. The award is a customer-relationship milestone but has limited direct financial impact.
About ALLISON TRANSMISSION HOLDINGS, INC.
Allison Transmission is an Indianapolis-based company founded in 1915. It is the world's largest maker of fully automatic transmissions for medium- and heavy-duty commercial and military vehicles. On January 1, 2026 it bought Dana's Off-Highway business, which roughly doubled its revenue and expanded it into axles and drivetrains for mining, construction and farm equipment.
How it makes money
The company sells transmissions, drivetrain parts, and spare parts and services. Most sales go to truck, bus, equipment and defense-vehicle makers. The legacy Allison Transmission unit (North American trucks, buses, defense, and aftermarket parts) brings in a bit more than half of revenue. In Q3 2026 it had about $880M in sales. The newly acquired Allison Off-Highway unit brings in most of the rest, about $650M in that quarter. Total 2026 sales are guided at roughly $6B, and debt is about $4B after the acquisition.
What usually moves ALSN
- North American medium- and heavy-duty truck demand
- Defense vehicle orders and budgets
- Mining, construction and farm equipment cycles
- Off-Highway acquisition integration and margins
- Debt reduction and share buybacks