Morgan Stanley: Allison Transmission At 'Vulnerable Point'
The American financial service company Morgan
Stanley has recently reported that Allison Transmission, despite its stable
financial performance in recent years, reaches a "vulnerable point in the
cycle".
Allison Transmission gained recognition as one
of the largest and most successful manufacturers of automatic transmissions for
commercial vehicles and the company undoubtedly has gained a solid position on
the market of automobile components over the past 7 years. The company's
achievements over the years resulted in impressive EBITDA margin rate of around
42% last year.
However, after several years of stable growth, there are some indications that these good days come to an end. In particular, sales in the crucial North American On Highway markets have decreased by more than 30% over the past 3 months compared to last year. This segment alone generates 50% of total company-wide sales, which implies the possibility for fiscal 2020 sales to decrease by 5%. The research firm will continue paying a close attention to North American sales info and if signs of improvement start to appear then more positive predictions can be made.
Moreover, Zacks, one of the leading investment
research companies, has reported that Allison’s sales for the current fiscal
quarter will reach the level of $684.48 million. Several professional analysts
have assessed company’s earnings: the lowest limit is $672.90 million and the
highest is $699.50 mln. For the same period of time in 2018, the company earned
$711.00 mln, thus we can clearly see the decrease by 3.7%. The official figures
will be unveiled by Allison by the end of the month.
According to Zacks, the volume of sales of Allison for the current year will reach $ 2.65 billion, with estimates from $ 2.63 billion to $ 2.67 billion. Next year, experts predict that the company's sales will fall to $ 2.53 billion, estimated at between $ 2.42 and $ 2.64 bln. Zack’s estimations are based on the info from analysts who cover Allison’s financial performance.
