Allison transmission pairs with Cummins natural gas engine

INDIANAPOLIS - Allison Transmission (NYSE:ALSN), a $7.1 billion market cap company with impressive gross profit margins of 48.41%, announced Monday that its 4500 Rugged Duty Series (RDS) fully automatic transmission has been successfully integrated with the Cummins X15N natural gas engine in Kenworth T880 tractors. The company, which maintains a "GREAT" financial health score according to InvestingPro, continues to demonstrate its market leadership in transmission technology.

Ozinga Renewable Energy Logistics has deployed vehicles with this powertrain combination, which pairs the Cummins engine’s 500 horsepower and 1850 pounds per foot of torque with Allison’s transmission technology.

"The lighter weight of the X15N engine, combined with the optimized performance of the 4500RDS transmission, not only enhances efficiency and performance but also increases payload capacity," said Brian Erickson, Director of Transportation at Ozinga Energy.

The integration aims to provide a sustainable option for heavy-duty transportation without compromising performance. According to David King, Product Manager of Natural Engines at Cummins, "The X15N features a broader torque curve, providing better low-end torque and improved drivability, particularly in challenging conditions such as hill climbing."

Beyond the Kenworth T880, the transmission-engine combination is available for order in the Kenworth L770, Peterbilt 567 and 520 models. Currently trading at an attractive P/E ratio of 9.72 and near its 52-week low, Allison Transmission appears undervalued based on InvestingPro’s Fair Value analysis, which considers multiple financial metrics and market conditions.

Rohan Barua, Vice President of North America Sales at Allison Transmission, stated that the 4500 RDS transmission "delivers the proven reliability and durability required to handle the tough duty cycles and demanding delivery schedules in heavy duty tractor and vocational truck applications."

According to the press release, when using renewable natural gas, the X15N engine can achieve a negative carbon footprint while maintaining lower NOx emissions compared to diesel engines. Discover 12 additional exclusive InvestingPro Tips and comprehensive financial analysis in our detailed Pro Research Report, helping investors make informed decisions about ALSN’s market position and growth potential.

In other recent news, Allison Transmission announced its second-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $2.29, compared to a forecast of $2.21. The company also reported revenue of $814 million, exceeding the anticipated $803.68 million. Additionally, Allison Transmission declared a quarterly cash dividend of $0.27 per share for the third quarter of 2025. This dividend will be paid on August 29, 2025, to stockholders of record as of August 20, 2025.

Oppenheimer has maintained an Outperform rating on Allison Transmission, with a price target of $115.00, following the company’s robust earnings report. The firm noted that Allison Transmission’s EBITDA for the second quarter was $313 million, surpassing both Oppenheimer’s estimate of $296 million and the consensus of $307 million. Meanwhile, BofA Securities raised its price target for Allison Transmission to $84.00 from $79.00 but maintained an Underperform rating on the stock. These developments highlight the company’s strong financial performance and the varying perspectives of analysts on its future prospects.

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