Otis Worldwide (OTIS) AI Stock Analysis

• Market Cap: $33.95B
• Dividend Yield: 1.86%
• Average Volume (3M): 3.83M
• Price to Earnings (P/E): 22.6
• Beta (1Y): 0.56
• Revenue Growth: -0.09%
• EPS Growth: 5.47%
• Country: US
• Employees: 72,000
• Sector: Industrials
• Sector Strength: 74
• Industry: Industrial - Machinery
• EPS (TTM): 1.05
• Shares Outstanding: 392,475,220
• 10 Day Avg. Volume: 3,221,207
• 30 Day Avg. Volume: 3,832,725
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 3.30
• Enterprise Value/Gross Profit: 10.89
• Enterprise Value/Ebitda: 21.43
• 1Y Price Target: $97.86
• Price Target Upside: 12.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 63 Neutral
• Price Target: $91.00 ▲(4.60% Upside)

Otis Worldwide's overall stock score reflects a balance of strong profitability and cash flow generation against financial risks from high leverage and negative equity. The technical analysis indicates bearish trends, while valuation metrics are moderate. Earnings call insights highlight strengths in service and modernization but also underline challenges in the China market and tariff impacts.

Positive Factors

Modernization Orders

Modernization orders saw an 18% increase, reflecting strong demand and growth potential in the service sector.

Order Growth

Americas Q4 orders increased by 15%, indicating sustained double-digit growth despite challenging comparisons.

Negative Factors

Earnings Performance

The Q4 earnings per share of 93 cents fell short of both Mse's 94 cents and consensus expectations of 96 cents.

Operating Profit

Operating profit was 3% below expectations due to weaker margins in the Service segment.

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 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 Financial Statement Overview

Summary

Otis Worldwide demonstrates solid profitability and cash flow generation, with a strong net profit margin of 10.68% 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	-164.00M	-183.00M	-33.00M	-89.00M	-353.00M
Financing Cash Flow	-1.35B	-309.00M	-1.35B	-3.65B	58.00M	-844.00M

Otis Worldwide Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 87.00
• 50DMA: Negative
• 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 Negative. The current price of 87 is below the 20-day moving average (MA) of 87.25, below the 50-day MA of 91.38, and below the 200-day MA of 95.10, indicating a bearish trend. The MACD of -1.08 indicates Negative momentum. The RSI at 45.40 is Neutral, neither overbought nor oversold. The STOCH value of 32.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$95.89B	27.60	27.42%	0.90%	-0.40%	24.40%
EMR	73 Outperform	$74.91B	27.82	10.86%	1.59%	4.78%	59.68%
ROK	73 Outperform	$38.44B	39.74	28.46%	1.54%	-8.23%	-3.29%
ITW	73 Outperform	$77.44B	23.31	109.06%	2.26%	-1.40%	11.65%
IR	67 Neutral	$31.48B	60.42	5.21%	0.10%	4.67%	-36.65%
Sector *	64 Neutral	$10.73B	15.74	7.56%	2.01%	2.76%	-15.10%
OTIS	63 Neutral	$33.95B	22.65	-33.93%	1.86%	-0.09%	5.47%

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.