Research · Sep 3, 2026
[ALSN] Allison Transmission Thesis 2026: Commercial Vehicle Cycle Drives Defense Tracked Capital Return
Allison Transmission Holdings, Inc. (NYSE: ALSN) FY2025 revenue ~$3.20-3.35B (+0-4%) with adj. EPS ~$8.85-9.50 reflecting continued post-2024 ~$2.05-2.15B aggregate North America On-Highway revenue (~64%+ aggregate revenue mix; selected primary US Class 4-8 commercial truck + bus + selected various medium + heavy-duty commercial vehicle) + selected continued post-2024 ~$425-460M aggregate Defense + Off-Highway revenue (~13% aggregate revenue mix; selected primary US Army + Marine Corps + Allied tracked + wheeled vehicle automatic transmissions) + selected continued post-2024 ~$385-415M aggregate Outside North America (ONA) On-Highway revenue (~12% aggregate revenue mix) + selected continued post-2024 ~$295-320M aggregate Service Parts + Support Equipment + Other revenue (~9% aggregate revenue mix) under continued President + CEO David Graziosi since 2018 (~7-year tenure as Allison Transmission CEO). The largest US + global commercial-duty fully automatic transmission manufacturer + Defense tracked + wheeled vehicle automatic transmission Tier 1 supplier. Founded 1915 as Indianapolis Speedway Team Co. by James Allison + Carl Fisher + Arthur Newby + Frank Wheeler in Indianapolis Indiana (~110-year heritage); selected post-2007 ~$5.6B+ Carlyle + Onex LBO from GM; selected post-March 2012 NYSE IPO; selected post-2018 David Graziosi CEO appointment. Headquartered in Indianapolis Indiana; ~3,400+ employees globally with ~$3.20-3.35B revenue. Four primary business segments: NA On-Highway (~64%+ ~$2.05-2.15B), Defense + Off-Highway (~13% ~$425-460M), ONA On-Highway (~12% ~$385-415M), Service Parts + Support Equipment + Other (~9% ~$295-320M). Geographic mix: US ~70%+ + selected various international ~30%. Commercial vehicle cycle (NA On-Highway): ~$2.05-2.15B North America On-Highway revenue; ~75%+ aggregate North America Class 4-8 medium + heavy-duty commercial vehicle automatic transmission market share. Defense tracked + e-Mobility cycle: ~$425-460M Defense + Off-Highway revenue; selected primary US Army + Marine Corps + Allied tracked + wheeled vehicle automatic transmissions; selected post-2024 selected various aggregate eGen Power 100D + 130D + selected various aggregate post-2024 e-Mobility platform development. President + CEO David Graziosi since 2018 (~7-year tenure); CFO Fred Bohley. Capital return: ~$1.04 annual dividend FY2025 (~+5-8% growth post-2024 dividend acceleration; ~9-year continuous dividend track post-2016); ~$300-450M aggregate FY2024-2025 buyback program (~$200-300M aggregate FY2025); aggregate capital return ~$300-400M FY2025; net leverage ratio ~1.5-2.0x; non-investment grade Ba1/BB+ credit rating. FY2026 thesis: Commercial vehicle cycle (NA On-Highway) + Defense tracked + e-Mobility cycle + ~$1.04 annual dividend + ~9-year continuous dividend track + ~$300-450M aggregate annual capital return + selected potential post-2024 dividend acceleration. Risks: Eaton + ZF + Aisin + Cummins + Volvo Group + General Dynamics Land Systems + BAE Systems Bradley + Oshkosh + AM General competition, Class 4-8 cycle, EV transition + eGen Power vs ICE transition, Defense budget cycle considerations.