Otis Worldwide (OTIS) AI Stock Analysis

• Market Cap: $35.47B
• Dividend Yield: 1.79%
• Average Volume (3M): 3.30M
• Price to Earnings (P/E): 23.9
• Beta (1Y): 0.56
• Revenue Growth: -0.09%
• EPS Growth: 5.47%
• Country: US
• Employees: 72,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.05
• Shares Outstanding: 392,475,220
• 10 Day Avg. Volume: 3,089,244
• 30 Day Avg. Volume: 3,302,532
• PEG Ratio: 1.14
• Price to Book (P/B): -7.67
• Price to Sales (P/S): 2.61
• P/FCF Ratio: 25.89
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 3.30
• Enterprise Value/Gross Profit: 10.89
• Enterprise Value/Ebitda: 21.43
• 1Y Price Target: $99.67
• Price Target Upside: 10.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 69 Neutral
• Price Target: $98.00 ▲(8.43% Upside)

Otis Worldwide's overall stock score reflects strong profitability and cash flow, bolstered by robust performance in its Service and Modernization segments. However, financial risks due to high leverage and negative equity, along with challenges in the China market, weigh on the score. The stock's valuation suggests it may be overvalued, and technical indicators show limited momentum. Despite these concerns, strategic initiatives and share repurchases provide a positive outlook.

Positive Factors

Service Segment Growth

The consistent growth in the Service segment, which is a significant revenue stream, ensures stable cash flow and strengthens Otis's market position, supporting long-term business sustainability.

Modernization Orders Surge

The significant increase in modernization orders and backlog indicates strong demand for upgrades, enhancing future revenue potential and reinforcing Otis's competitive edge in the industry.

Strong Cash Flow Generation

Robust cash flow generation supports Otis's ability to invest in growth initiatives, manage debt, and return capital to shareholders, contributing to long-term financial health and strategic flexibility.

Negative Factors

China Market Challenges

The decline in the Chinese market poses a significant risk to Otis's growth prospects, as China is a major market for new equipment sales, impacting overall revenue and strategic expansion.

High Leverage and Negative Equity

High leverage and negative equity can strain Otis's financial stability, limiting its ability to finance new projects and increasing vulnerability to economic downturns, affecting long-term sustainability.

New Equipment Sales Decline

The decline in new equipment sales, particularly in key regions, could hinder Otis's revenue growth and market share, affecting its ability to capitalize on new construction and urbanization trends.

Otis Worldwide Business Overview & Revenue Model

Company Description

Otis Worldwide Corporation manufactures, installs, and services elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. It had a network of approximately 34,000 service mechanics operating approximately 1,400 branches and offices. The company was founded in 1853 and is headquartered in Farmington, Connecticut.

How the Company Makes Money

Otis generates revenue through two main streams: the sale of new equipment and ongoing service contracts. The New Equipment segment includes the design, manufacturing, and installation of elevators and escalators, which typically involves significant upfront capital investment from customers. The Service segment, which constitutes a substantial portion of Otis's revenue, includes maintenance, modernization, and repair services for existing installations. This recurring revenue model benefits from long-term contracts, providing a steady cash flow. Additionally, strategic partnerships with construction firms and property developers enhance Otis's market reach. The company's investments in technology, such as smart elevators and predictive maintenance systems, also help drive revenue by attracting customers seeking advanced solutions that improve operational efficiency.

Otis Worldwide Financial Statement Overview

Summary

Otis Worldwide demonstrates solid profitability and cash flow generation, with a strong net profit margin and robust operating cash flows. However, the negative equity and high leverage pose significant financial risks, and stagnant revenue growth is a concern.

Income Statement

The income statement reflects stable performance with a solid gross profit margin of approximately 15.17% for TTM, supported by consistent EBIT and EBITDA margins at 13.07% and 13.88% respectively. However, there was a slight decline in total revenue from the previous year, which is a concern. The net profit margin is strong at 10.68% for TTM, indicating efficiency in converting revenue into profit.

Balance Sheet

The balance sheet shows a challenging financial structure with negative stockholders' equity, impacting the debt-to-equity ratio, which is not meaningful. Despite this, the company maintains a high debt level, contributing to potential financial risk. The equity ratio is negative due to equity deficits, highlighting leverage concerns.

Cash Flow

The cash flow statement indicates robust operating cash flows with a strong operating cash flow to net income ratio of 0.98. Free cash flow remains positive, with a free cash flow to net income ratio of 0.89, demonstrating effective cash generation despite fluctuations in capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.17B	14.26B	14.21B	13.69B	14.30B	12.76B
Gross Profit	4.30B	4.30B	4.23B	3.94B	4.21B	3.80B
EBITDA	2.18B	2.22B	2.37B	2.22B	2.30B	1.82B
Net Income	1.51B	1.65B	1.41B	1.25B	1.25B	906.00M
Balance Sheet
Total Assets	10.49B	11.32B	10.12B	9.82B	12.28B	10.71B
Cash, Cash Equivalents and Short-Term Investments	688.00M	2.30B	1.27B	1.19B	1.56B	1.78B
Total Debt	8.12B	8.74B	7.31B	7.21B	7.79B	6.50B
Total Liabilities	15.70B	16.04B	14.84B	14.48B	15.26B	13.91B
Stockholders Equity	-5.37B	-4.85B	-4.92B	-4.87B	-3.63B	-3.86B
Cash Flow
Free Cash Flow	1.35B	1.44B	1.49B	1.45B	1.59B	1.30B
Operating Cash Flow	1.49B	1.56B	1.63B	1.56B	1.75B	1.48B
Investing Cash Flow	-387.00M	-239.00M	-183.00M	-33.00M	-89.00M	-353.00M
Financing Cash Flow	-1.35B	-234.00M	-1.35B	-3.65B	58.00M	-844.00M

Otis Worldwide Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 90.38
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTIS, the sentiment is Positive. The current price of 90.38 is above the 20-day moving average (MA) of 88.39, above the 50-day MA of 88.39, and below the 200-day MA of 94.31, indicating a neutral trend. The MACD of 0.35 indicates Negative momentum. The RSI at 58.45 is Neutral, neither overbought nor oversold. The STOCH value of 31.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OTIS.

Otis Worldwide Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PH	79 Outperform	$95.00B	27.68	25.81%	0.91%	-0.40%	24.40%
EMR	73 Outperform	$72.38B	27.62	13.35%	1.64%	4.78%	59.68%
ROK	73 Outperform	$38.63B	40.31	28.01%	1.53%	-8.23%	-3.29%
IR	73 Outperform	$32.71B	64.26	5.18%	0.10%	4.67%	-36.65%
ITW	73 Outperform	$76.09B	22.91	104.83%	2.30%	-1.40%	11.65%
OTIS	69 Neutral	$35.47B	23.89	-33.93%	1.79%	-0.09%	5.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Otis Worldwide Corporate Events

Otis Worldwide Issues $500 Million in New Notes

On September 4, 2025, Otis Worldwide Corporation issued $500 million in 5.131% Notes due 2035, registered under the Securities Act of 1933. The net proceeds, estimated at $495.2 million, will be used to repay existing debt, including ¥21.5 billion of 0.370% Notes due March 18, 2026, and for general corporate purposes. This strategic financial move aims to strengthen Otis Worldwide’s financial position by managing its debt obligations and supporting its operational flexibility.

Otis Worldwide Board Member Resignation Announced

On August 24, 2025, Shailesh Jejurikar, a member of the Board of Directors and Chair of the Compensation Committee at Otis Worldwide Corporation, announced his resignation effective September 9, 2025. His departure was not due to any disagreements with the company. Consequently, the Board reduced its size from eleven to ten members and reassigned committee roles, with Kathy Hopinkah Hannan taking over as Chair of the Compensation Committee.

Otis Worldwide Secures New $1.5 Billion Credit Facility

On August 8, 2025, Otis Worldwide Corporation entered into a new $1,500 million revolving credit facility agreement set to mature on August 8, 2030, replacing a previous agreement that was terminated without penalties. This new credit agreement allows Otis to increase its revolving credit commitment by up to $500 million and includes covenants that restrict certain financial activities, ensuring the company maintains a maximum consolidated leverage ratio, with potential default consequences if violated.