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Otis Worldwide (OTIS)
NYSE:OTIS
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Otis Worldwide
(NYSE:OTIS)
Rating:62Neutral
Price Target:
$95.00
â–²(6.50%Upside)
Positive Factors
Order Growth
Americas orders increased by 15%, signaling sustained double-digit growth and overcoming challenging comparisons.
Service Modernization
Modernization orders in the service sector rose by 18%, indicating strong demand and future revenue potential.
Negative Factors
Earnings Performance
Q4 earnings per share fell short of expectations, indicating challenges in meeting analyst estimates.
Operating Profit
Operating profit was 3% below expectations due to weaker service margins, signaling potential profitability challenges.
Otis Worldwide (OTIS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$35.21B
Dividend Yield1.78%
Average Volume (3M)2.42M
Price to Earnings (P/E)23.4
Beta (1Y)0.58
Revenue Growth-0.09%
EPS Growth5.47%
CountryUS
Employees72,000
SectorIndustrials
Sector Strength93
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.05
Shares Outstanding394,676,600
10 Day Avg. Volume3,042,510
30 Day Avg. Volume2,418,396
Financial Highlights & Ratios
PEG Ratio-29.45
Price to Book (P/B)-6.61
Price to Sales (P/S)0.00
P/FCF Ratio26.30
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue1.70
Enterprise Value/Gross Profit47.58
Enterprise Value/Ebitda11.63
Forecast
1Y Price Target
$99.50Price Target Upside11.55% Upside
Rating ConsensusHold
Number of Analyst Covering7
Otis Worldwide Business Overview & Revenue Model
Company DescriptionOtis Worldwide Corporation, commonly known as Otis, is a leading global manufacturer and service provider of elevators, escalators, and moving walkways. The company operates in the building and construction sectors, offering a wide range of products designed to improve mobility in urban environments. With a strong presence across the globe, Otis is renowned for its innovation and commitment to safety, reliability, and efficiency in vertical transportation solutions.
How the Company Makes MoneyOtis Worldwide generates revenue primarily through the sale and installation of elevators, escalators, and related equipment, as well as through the provision of maintenance and repair services. A significant portion of the company's earnings comes from service contracts and modernization projects, which involve upgrading existing systems to improve performance and safety. Otis maintains long-term relationships with building owners, developers, and construction companies, ensuring a steady stream of recurring revenue from maintenance and service agreements. The company's partnerships with key players in the real estate and construction industries also contribute to its financial success by facilitating access to large-scale projects and enhancing its market reach.
Otis Worldwide Key Performance Indicators (KPIs)
Any
Remaining Performance Obligations
Indicates the total value of contracted work that has yet to be completed, providing a glimpse into future revenue streams and business stability.
Indicates the total value of contracted work that has yet to be completed, providing a glimpse into future revenue streams and business stability.
Data provided by:
Main Street Data
Main Street DataOtis Worldwide Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: -11.67%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the Service and Modernization segments, successful cost-saving initiatives, and recognition for sustainability efforts. However, these positives were counterbalanced by significant declines in New Equipment orders, particularly in China, and overall sales declines in the New Equipment segment, alongside challenges in EPS growth and cash flow.Q2-2025 Updates
Positive Updates
Service Segment Performance
The Service segment achieved a 4% organic sales increase, with a 4% growth in the maintenance portfolio and a record operating margin of 24.9%.
Modernization Orders Surge
Modernization orders grew by 22%, with a backlog increase of 16% at constant currency, driven by strong performance in the Americas, China, and Asia Pacific.
Successful Cost Savings Initiatives
Progress with UpLift is on track to achieve $200 million in run rate savings by year-end, and additional actions in China are expected to yield $40 million in savings.
Share Repurchases and Acquisitions
Otis completed $300 million in share repurchases in Q2, totaling $550 million year-to-date, and closed on the acquisition of 8 urban elevator locations in the U.S.
Sustainability Recognition
Otis received several sustainability awards, including recognition from USA Today, Forbes, Newsweek, and TIME magazine for its environmental performance.
Negative Updates
New Equipment Orders Decline in China
New Equipment orders in China decreased by more than 20% due to ongoing economic challenges, negatively impacting overall order performance.
Organic Sales Decline in New Equipment Segment
New Equipment organic sales declined by 11% in Q2, with significant declines in China, Americas, and Asia Pacific regions.
Adjusted EPS and Free Cash Flow Challenges
Adjusted EPS declined by 1% in Q2, and adjusted free cash flow was lower than expected at $243 million for the quarter.
Company Guidance
In Otis' second quarter 2025 earnings call, the company provided a comprehensive overview of its financial performance and future outlook, focusing on several key metrics. Organic Service sales increased by 4% year-over-year, with the maintenance portfolio also growing 4%, contributing to their industry-leading 2.4 million unit portfolio under service. Modernization orders accelerated by 22%, ending the quarter with a backlog up 16% at constant currency. New Equipment orders decreased by 1%, predominantly due to economic challenges in China, although orders outside of China rose by 11%. Otis aims to achieve $200 million in UpLift run rate savings and approximately $40 million from its China transformation by year-end. The company completed $300 million in share repurchases in the second quarter, totaling $550 million for the year. Adjusted EPS for the first half of 2025 was $1.97, reflecting a 2% growth from the previous year. Despite facing headwinds, including tariffs, Otis maintained its 2025 outlook with expectations for $14.5 to $14.6 billion in net sales and adjusted operating profit between $2.4 billion and $2.5 billion. They also anticipate adjusted EPS to range from $4 to $4.10, representing 4% to 7% growth compared to 2024.Otis Worldwide Financial Statement Overview
Summary
Otis Worldwide shows solid profitability and cash flow generation, with strong operating cash flows and a robust net profit margin. However, negative equity and high leverage present 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.75
Positive
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.60
Neutral
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.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 14.26B | 14.21B | 13.69B | 14.30B | 12.76B |
| Gross Profit | 4.29B | 4.19B | 3.92B | 4.19B | 3.78B |
| EBITDA | 2.22B | 2.37B | 2.22B | 2.31B | 1.83B |
| Net Income | 1.65B | 1.41B | 1.25B | 1.25B | 906.00M |
Balance Sheet | |||||
| Total Assets | 11.32B | 10.12B | 9.82B | 12.28B | 10.71B |
| Cash, Cash Equivalents and Short-Term Investments | 2.30B | 1.27B | 1.19B | 1.56B | 1.78B |
| Total Debt | 8.74B | 7.31B | 7.21B | 7.79B | 6.50B |
| Total Liabilities | 16.04B | 14.84B | 14.48B | 15.26B | 13.91B |
| Stockholders Equity | -4.85B | -4.92B | -4.87B | -3.63B | -3.83B |
Cash Flow | |||||
| Free Cash Flow | 1.44B | 1.49B | 1.45B | 1.59B | 1.30B |
| Operating Cash Flow | 1.56B | 1.63B | 1.56B | 1.75B | 1.48B |
| Investing Cash Flow | -164.00M | -183.00M | -33.00M | -89.00M | -353.00M |
| Financing Cash Flow | -309.00M | -1.35B | -3.65B | 58.00M | -844.00M |
Otis Worldwide Technical Analysis
Negative
89.20
Price Trends
96.97
Negative
97.64
Negative
97.51
Negative
Market Momentum
-1.27
Positive
32.95
Neutral
20.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTIS, the sentiment is Negative. The current price of 89.2 is below the 20-day moving average (MA) of 98.09, below the 50-day MA of 96.97, and below the 200-day MA of 97.51, indicating a bearish trend. The MACD of -1.27 indicates Positive momentum. The RSI at 32.95 is Neutral, neither overbought nor oversold. The STOCH value of 20.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OTIS.
Otis Worldwide Risk Analysis
Otis Worldwide disclosed 28 risk factors in its most recent earnings report. Otis Worldwide reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Otis Worldwide Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $93.23B | 28.03 | 27.16% | 0.92% | -0.23% | 22.41% | |
77 Outperform | $76.72B | 23.17 | 107.62% | 2.29% | -1.85% | 12.04% | |
73 Outperform | $35.06B | 42.93 | 8.09% | 0.09% | 5.27% | 0.61% | |
69 Neutral | $82.59B | 35.05 | 9.82% | 1.44% | 6.49% | 24.14% | |
69 Neutral | $40.24B | 45.07 | 25.86% | 1.45% | -11.19% | -22.50% | |
62 Neutral | $35.21B | 23.41 | -33.93% | 1.78% | -0.09% | 5.47% | |
61 Neutral | C$6.54B | 7.73 | 2.76% | 2.57% | 6.48% | -23.55% |
* Industrials Sector Average
Performance Comparison
OTIS
Otis Worldwide
89.79
-2.17
-2.36%
EMR
Emerson Electric Company
149.63
34.85
30.36%
ITW
Illinois Tool Works
261.70
20.02
8.28%
PH
Parker Hannifin
738.82
189.89
34.59%
ROK
Rockwell Automation
358.52
86.46
31.78%
IR
Ingersoll Rand
88.27
-10.34
-10.49%
Otis Worldwide Corporate Events
Executive/Board ChangesShareholder Meetings
Otis Worldwide Holds Annual Shareholders Meeting
Neutral
May 16, 2025
On May 15, 2025, Otis Worldwide Corporation held its Annual Meeting of Shareholders, where key decisions were made. The election of directors for the upcoming term was confirmed, while a proposal for executive compensation was not approved. Additionally, PricewaterhouseCoopers LLP was appointed as the independent auditor for 2025, and a proposal on political contributions reporting was rejected.
The most recent analyst rating on (OTIS) stock is a Sell with a $94.00 price target. To see the full list of analyst forecasts on Otis Worldwide stock, see the OTIS Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.