Downside risk is limited for Paccar (PCAR) and Meritor (MTOR), even if a recession is coming in 2020, Piper Jaffray analyst Alexander Potter tells investors in a research note. After examining "the degree to which truck stock valuations have fallen far enough to reflect a worst-case (recessionary) scenario," the analyst names Paccar and Meritor his highest conviction truck ideas. He believes that if expectations for a recession continue rising, stocks like Allison Transmission (ALSN) and Navistar (NAV) "would probably fare less well." These stocks would need to fall by 39% and 44%, respectively, before they fully reflected a recessionary outlook, says Potter.

"We are reaffirming our full year 2024 guidance provided to the market on February 13. Allison expects 2024 Net Sales in the range of $3,050 to $3,150 million, Net Income in the range of $635 to $685 million, Adjusted EBITDA in the range of $1,070 to $1,130 million, Net Cash Provided by Operating Activities in the range of $700 to $760 million, Capital Expenditures in the range of $125 to $135 million, and Adjusted Free Cash Flow in the range of $575 to $625 million."