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Time to Buy These Top Automotive Equipment Stocks for Value
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Checking out the Zacks Rank #1 (Strong Buy) list, Allison Transmission Holdings (ALSN - Free Report) and Dorman Products (DORM - Free Report) are two standouts in terms of value.
Belonging to the auto sector, Allison Transmission provides fully automatic transmissions and propulsion solutions for commercial and defense vehicles with Dorman Products supplying replacement and upgrade parts in the motor vehicle aftermarket.
That said, let’s take a look at why now is a good time to buy these highly-ranked automotive equipment stocks.
Allison Transmission’s “A” Value Score
Notably, Allison Transmission's stock has an “A” Zacks Style Scores grade for Value with its P/E discount being very tempting at the moment. Trading at $82, Allision Transmission’s stock has a 10.6X forward earnings multiple compared to its Zacks Automotive-Original Equipment industry average of 19.1X.
Image Source: Zacks Investment Research
Furthermore, Allision Transmission’s annual earnings are expected to rise 3% in fiscal 2024 and are forecasted to jump another 9% in FY25 to $8.38 per share. Allison Transmission’s stock also trades at 2.2X forward sales which is near the optimum level of less than 2X with the company’s top line projected to expand 2% this year and slated to rise another 5% in FY25 to $3.27 billion.
Image Source: Zacks Investment Research
Dorman Products “B” Value Score
With a “B” Zacks Style Scores grade for Value, Dorman Products stock trades at $97 and 17.4X forward earnings which is nicely beneath the S&P 500’s 21.9X and closer to its Zacks Automotive-Replacement Parts industry average of 14.6X.
Image Source: Zacks Investment Research
Plus, Dorman Products’ EPS is forecasted to climb 22% this year and is expected to grow another 10% in FY25 to $6.14 per share. Dorman Products stock also trades at 1.5X sales with its top line expected to expand 4% in both FY24 and FY25.
Image Source: Zacks Investment Research
Blazing Price Performances
Year to date, Allison Transmission shares have soared +43% while Dorman Products stock has climbed +16% to largely outperform the broader indexes. Better still, earnings estimate revisions for Allision Transmission and Dorman Products' FY24 and FY25 are noticably higher over the last 60 days which is indicative of more short-term upside.
Image Source: Zacks Investment Research
Bottom Line
With their attractive valuations being accompanied by sound growth, now looks like a good time to buy Allison Transmission and Dorman Products stock. To that point, it would be no surprise if their stocks continued to rip higher this year.
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Time to Buy These Top Automotive Equipment Stocks for Value
Checking out the Zacks Rank #1 (Strong Buy) list, Allison Transmission Holdings (ALSN - Free Report) and Dorman Products (DORM - Free Report) are two standouts in terms of value.
Belonging to the auto sector, Allison Transmission provides fully automatic transmissions and propulsion solutions for commercial and defense vehicles with Dorman Products supplying replacement and upgrade parts in the motor vehicle aftermarket.
That said, let’s take a look at why now is a good time to buy these highly-ranked automotive equipment stocks.
Allison Transmission’s “A” Value Score
Notably, Allison Transmission's stock has an “A” Zacks Style Scores grade for Value with its P/E discount being very tempting at the moment. Trading at $82, Allision Transmission’s stock has a 10.6X forward earnings multiple compared to its Zacks Automotive-Original Equipment industry average of 19.1X.
Image Source: Zacks Investment Research
Furthermore, Allision Transmission’s annual earnings are expected to rise 3% in fiscal 2024 and are forecasted to jump another 9% in FY25 to $8.38 per share. Allison Transmission’s stock also trades at 2.2X forward sales which is near the optimum level of less than 2X with the company’s top line projected to expand 2% this year and slated to rise another 5% in FY25 to $3.27 billion.
Image Source: Zacks Investment Research
Dorman Products “B” Value Score
With a “B” Zacks Style Scores grade for Value, Dorman Products stock trades at $97 and 17.4X forward earnings which is nicely beneath the S&P 500’s 21.9X and closer to its Zacks Automotive-Replacement Parts industry average of 14.6X.
Image Source: Zacks Investment Research
Plus, Dorman Products’ EPS is forecasted to climb 22% this year and is expected to grow another 10% in FY25 to $6.14 per share. Dorman Products stock also trades at 1.5X sales with its top line expected to expand 4% in both FY24 and FY25.
Image Source: Zacks Investment Research
Blazing Price Performances
Year to date, Allison Transmission shares have soared +43% while Dorman Products stock has climbed +16% to largely outperform the broader indexes. Better still, earnings estimate revisions for Allision Transmission and Dorman Products' FY24 and FY25 are noticably higher over the last 60 days which is indicative of more short-term upside.
Image Source: Zacks Investment Research
Bottom Line
With their attractive valuations being accompanied by sound growth, now looks like a good time to buy Allison Transmission and Dorman Products stock. To that point, it would be no surprise if their stocks continued to rip higher this year.