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Allison (ALSN) Partners With U.S. Army for Allison X200-4A

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Allison Transmission Holdings, Inc. (ALSN - Free Report) recently announced its partnership with the U.S. Army’s Tank-automotive & Armaments Command (TACOM) to include the upgraded Allison X200-4A in the M113 armored personnel carrier family of vehicles.

The X200-4A is a cross-drive transmission with differential steering and integral hydraulic brakes. It presents a hydraulic torque converter in combination with a range planetary package providing superior propulsion for the U.S. Army’s tracked military applications.

The M113 delivers critical capability to armored brigades in medical, combat engineering, command and control, and indirect fire. It is the U.S. Army’s largest armored vehicle fleet, with about 5,000 vehicles across the Active and Reserve Components.

Allison has been in alliance with the Department of Defense since 1946 to develop propulsion solutions that deliver in the toughest conditions. The company expects to supply more than 300 transmissions through 2021 to the U.S. Army, in order to back the army’s mission of boosting combat readiness.

In the past three months, Allison’s shares have appreciated 3% compared with the industry’s 3.6% growth.

Allison, in October, reiterated its guidance for 2019. For the year, it now anticipates net sales of $2.65-$2.7 billion. Further, net income is estimated to be $555-$575 million and adjusted EBITDA is projected at $1.03-$1.07 billion.

For full-year 2019, net cash provided by operating activities is projected at $745-$775 million, while adjusted free cash flow is expected in the $570-$610 million band.

Zacks Rank and Stocks to Consider

Currently, Allison carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector are CarMax, Inc. (KMX - Free Report) , Spartan Motors, Inc. (SPAR - Free Report) and SPX Corporation (SPXC - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CarMax has a projected earnings growth rate of 10.65% for the current year. Its shares have gained 53% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 142.4% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has appreciated 84.2% in the past year.

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