Allison Transmission (NYSE:ALSN) to Buyback $5.00 billion in Shares

Allison Transmission (NYSE:ALSN) announced that its Board of Directors has initiated a stock buyback program on Thursday, February 20th, RTT News reports. The company plans to buyback $5.00 billion in shares. This buyback authorization authorizes the auto parts company to repurchase up to 57.1% of its stock through open market purchases. Stock buyback programs are usually a sign that the company’s leadership believes its stock is undervalued.

Wall Street Analysts Forecast Growth

Several equities research analysts have issued reports on the stock. StockNews.com downgraded shares of Allison Transmission from a “strong-buy” rating to a “buy” rating in a research report on Thursday, February 13th. Bank of America raised their price objective on shares of Allison Transmission from $67.00 to $77.00 and gave the stock an “underperform” rating in a research report on Wednesday, October 30th. Oppenheimer raised their price objective on shares of Allison Transmission from $90.00 to $115.00 and gave the stock an “outperform” rating in a research report on Wednesday, October 30th. The Goldman Sachs Group raised their price objective on shares of Allison Transmission from $82.00 to $94.00 and gave the stock a “sell” rating in a research report on Thursday, December 12th. Finally, Morgan Stanley raised their price objective on shares of Allison Transmission from $110.00 to $112.00 and gave the stock an “equal weight” rating in a research report on Tuesday, December 17th. Two research analysts have rated the stock with a sell rating, four have given a hold rating and three have assigned a buy rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $100.75.

Allison Transmission Stock Performance

Shares of ALSN traded down $1.44 during mid-day trading on Thursday, hitting $102.34. 716,692 shares of the company’s stock were exchanged, compared to its average volume of 612,145. Allison Transmission has a 52 week low of $69.80 and a 52 week high of $122.53. The stock’s 50-day simple moving average is $111.81 and its 200-day simple moving average is $104.21. The firm has a market cap of $8.75 billion, a price-to-earnings ratio of 12.31 and a beta of 1.00. The company has a quick ratio of 2.42, a current ratio of 3.04 and a debt-to-equity ratio of 1.45.

Allison Transmission (NYSE:ALSN) last announced its earnings results on Tuesday, February 11th. The auto parts company reported $2.01 EPS for the quarter, topping the consensus estimate of $1.90 by $0.11. Allison Transmission had a net margin of 22.67% and a return on equity of 47.95%. On average, equities research analysts expect that Allison Transmission will post 9.06 EPS for the current year.

Allison Transmission Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, March 14th. Investors of record on Monday, March 3rd will be paid a $0.27 dividend. This represents a $1.08 dividend on an annualized basis and a yield of 1.06%. This is a boost from Allison Transmission’s previous quarterly dividend of $0.25. Allison Transmission’s dividend payout ratio (DPR) is 12.03%.

Insider Activity at Allison Transmission

In related news, CEO David S. Graziosi sold 1,723 shares of Allison Transmission stock in a transaction that occurred on Wednesday, November 27th. The shares were sold at an average price of $120.26, for a total value of $207,207.98. Following the transaction, the chief executive officer now directly owns 168,833 shares of the company’s stock, valued at $20,303,856.58. This trade represents a 1.01 % decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, SVP John Coll sold 2,000 shares of Allison Transmission stock in a transaction that occurred on Tuesday, December 31st. The shares were sold at an average price of $108.40, for a total transaction of $216,800.00. Following the completion of the transaction, the senior vice president now directly owns 6,420 shares in the company, valued at $695,928. This trade represents a 23.75 % decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold 20,639 shares of company stock valued at $2,448,077 over the last three months. 1.10% of the stock is owned by insiders.

About Allison Transmission

Allison Transmission Holdings, Inc, together with its subsidiaries, designs, manufactures, and sells fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. It provides commercial-duty on-highway, off-highway and defense fully automatic transmissions, and electric hybrid and fully electric systems.