UPDATE: Credit Suisse Upgrades Allison Transmission

In a note issued Monday morning, Credit Suisse analyst Jamie Cook upgraded shares of Allison Transmission Holdings Inc ALSN from Neutral to Outperform with a $35 price target.

Cook commented, "We believe ALSN is compelling on a risk/reward basis as a higher quality NA industrial positioned in the sweet spot of the truck market (straight vs. line haul) with a potentially improving story."

To this point, Cook noted 40 percent of Allison's sales are levered to the later cycle NA straight truck market, which is still ~30 percent below previous peak levels. He also noted the straight truck market has been holding solid at low-to-mid single digit growth.

Looking forward, Cook is predicting the market will hit its peak by 2015 based on historical cycle lengths. He also expects Allison to ramp its share repurchases in 2015 and return as much as 70 percent of its free cash flow to shareholders.