ALSN
Allison Transmission Holdings, Inc.
$111.62
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 41.4% below fair value
You pay
$111.62
Bear
$161.26
Fair
$190.58
Bull
$219.90
Bear
$161.26
+44.5%
$7.33 × 22x P/E
Fair
$190.58
+70.7%
$7.33 × 26x P/E
Bull
$219.90
+97.0%
$7.33 × 30x P/E
Adjust Assumptions
26.0x
7.33$
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
15.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$127.00
Divergence from AlphaVal
50%
Summary
Applying a 26x P/E to adjusted EPS of $7.33, the base-case value is $190.58 per share. DDM cross-check: $102.46.
Warnings
Dividend-based valuation: $102.46 (below our primary estimate by 46%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $127.00 (from 29 analysts). Our estimate is 50% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples