UPDATE: Piper Jaffray Initiates Allison Transmission Holdings at Overweight on Secular Strength
Piper Jaffray initiated its coverage on Allison Transmission Holdings (NYSE: ALSN) with an Overweight rating and a $24 price target.
Piper Jaffray commented, "Like many cap equipment stocks, ALSN's end markets are currently characterized by a high degree of uncertainty. However, automatic transmissions are used in less than 5% of trucks and buses outside of the U.S., and as penetration increases in developing countries like China and India, we believe Allison's quasi-monopoly status will allow the company to expand internationally even without material growth in underlying truck, bus, and machinery markets. This potential for market outperformance, coupled with 45%+ gross margins, should give investors faith in our 2013 estimates and lead to an above-average multiple of 9x 2013 EV/EBITDA."
Allison Transmission Holdings closed at $19.97 on Monday.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.