Allison Transmission Lowers FY25 Revenue Outlook to $3.075B-$3.175B

Allison Transmission has revised its FY25 revenue forecast to $3.075B-$3.175B from $3.2B-$3.3B. The company expects net income in the range of $640-$680 million, adjusted EBITDA between $1,130-$1,180 million, and adjusted free cash flow between $620-$660 million. The revision is due to current market conditions, anticipated acquisition-related expenses, and favorable cash income tax impacts from the One Big Beautiful Bill Act.

Allison Transmission Holdings, Inc. (ALSN) has revised its fiscal year 2025 (FY25) revenue forecast, reflecting current market conditions and anticipated acquisition-related expenses. The company now expects net sales to range between $3,075 million and $3,175 million, down from its previous projection of $3,2 billion to $3,3 billion. This adjustment is attributed to the ongoing market dynamics and the costs associated with the acquisition of Dana's Off-Highway business, which was announced in the second quarter of 2025.

Allison Transmission also revised its net income and adjusted EBITDA projections. Net income is now expected to be between $640 million and $680 million, while adjusted EBITDA is projected to range from $1,130 million to $1,180 million. Additionally, the company anticipates adjusted free cash flow to be between $620 million and $660 million. The revisions reflect favorable cash income tax impacts from the One Big Beautiful Bill Act.

The company's second-quarter (Q2) 2025 results demonstrated robust performance, with sales beating analyst expectations by $8.63 million, reaching $814 million. The diluted earnings per share (EPS) also exceeded estimates by $0.07, hitting $2.29. The acquisition of Dana's Off-Highway business for $2.7 billion was a significant driver of the quarter's results, although it also incurred one-time costs.

Analysts have responded positively to the news, with an average rating of "hold" and a breakdown of recommendations including four "strong buy" or "buy," four "hold," and one "sell" or "strong sell." The median 12-month price target for Allison Transmission is $105.00, about 16.5% above its August 1 closing price of $87.69.

The stock has recently traded at 10 times the next 12-month earnings, compared to a P/E of 10 three months ago, reflecting the market's optimism about the company's prospects.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_PLX7391F9:0-allison-transmission-q2-sales-beat-estimates/
[2] https://seekingalpha.com/news/4477855-allison-transmission-holdings-gaap-eps-of-2_29-beats-by-0_07-revenue-of-814m-beats-by-8_63m