Allison Transmission: Earnings Compounder At An Attractive Valuation

Allison Transmission offers a compelling buy opportunity, driven by dominant North American market share and strong free cash flow generation. ALSN benefits from robust municipal spending, high adjusted EBITDA margins (37.5%), and a resilient business model less exposed to cyclical auto production. Forward catalysts include accelerating defense spending, electrification initiatives, and a projected 9.6% CAGR in on-highway transmission systems through 2030.