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Otis Worldwide (OTIS)
NYSE:OTIS
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Otis Worldwide
(NYSE:OTIS)
70Outperform
Positive Factors
Orders and Growth
Americas Q4 orders increased by 15%, sustaining double-digit growth for the second straight quarter.
Service and Modernization
Modernization orders were up 18%, and the maintenance portfolio units increased by 4.2%.
Service Growth
Service strength is expected to continue, supporting top-line growth and margin expansion.
Negative Factors
China Market Challenges
The China construction markets are likely down again, adding concerns with price deflation, credit risks, and rising US trade tensions.
New Equipment Sales
The new equipment sales outlook was guided down due to persistent weakness in China.
Operating Profit
Operating profit came in 3% below expectations due to softer Service margins.
Otis Worldwide (OTIS) vs. S&P 500 (SPY)
Market Cap
$38.41B
Dividend Yield1.64%
Average Volume (3M)2.84M
Price to Earnings (P/E)23.9
Beta (1Y)0.70
Revenue Growth-0.88%
EPS Growth9.98%
CountryUS
Employees72,000
SectorIndustrials
Sector Strength75
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.93
Shares Outstanding395,629,180
10 Day Avg. Volume3,542,961
30 Day Avg. Volume2,839,581
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.81
Price to Cash Flow (P/CF)14.50
P/FCF Ratio13.80
Enterprise Value/Market Cap1.14
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit10.27
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$95.00Price Target Upside-1.32% Downside
Rating ConsensusHold
Number of Analyst Covering5
Otis Worldwide Business Overview & Revenue Model
Company DescriptionOtis 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 MoneyOtis Worldwide generates revenue through two primary streams: new equipment sales and service contracts. The new equipment segment involves the sale and installation of elevators, escalators, and moving walkways, which constitutes a significant portion of their revenue. This includes customized solutions tailored to the specific needs of various building projects across residential, commercial, and infrastructure sectors. The service segment, which often provides a stable and recurring revenue stream, involves maintenance, repair, and modernization services for existing equipment. This includes long-term maintenance contracts that ensure ongoing safety and efficiency of the systems installed by Otis. Additionally, the company benefits from strategic partnerships and alliances, especially in emerging markets, which further contribute to its earnings by expanding its market reach and customer base.
Otis Worldwide Key Performance Indicators (KPIs)
Any
Remaining Performance Obligations
Shows the value of contracted work yet to be completed, indicating future revenue streams and the company's ability to secure ongoing business.
Shows the value of contracted work yet to be completed, indicating future revenue streams and the company's ability to secure ongoing business.
Data provided by:
Main Street Data
Main Street DataOtis Worldwide Financial Statement Overview
Summary
Otis Worldwide shows strong income and cash flow metrics, reflecting solid profitability and cash management. However, the negative equity on the balance sheet due to high leverage is a concern. Overall, the company is financially stable with caution advised regarding its leverage.Income Statement
Otis Worldwide demonstrates stable revenue with moderate growth over the years. The gross profit margin for the TTM is approximately 46.43%, and the net profit margin stands at around 10.83%, indicating solid profitability. However, there is a slight decline in revenue compared to the previous year, which is a minor concern. EBIT and EBITDA margins are healthy at 13.26% and 14.55% respectively, showcasing operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a negative stockholders' equity, suggesting high leverage which could be a risk factor. The debt-to-equity ratio is not calculable due to negative equity, yet the equity ratio is negative as well, indicating financial instability. While the company manages its liabilities, the high debt levels are a potential concern.60
Neutral
Cash Flow
The company shows a strong cash flow with positive free cash flow and a healthy operating cash flow to net income ratio. Free cash flow growth is stable, providing a good cushion for financial operations. However, fluctuations in financing cash flow suggest potential volatility in financial strategies.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 |
| 4.26B | 4.19B | 3.92B | 4.19B | 3.78B | EBIT |
| 2.01B | 2.19B | 2.03B | 2.11B | 1.64B | EBITDA |
| 2.23B | 2.37B | 2.22B | 2.31B | 1.83B | Net Income Common Stockholders |
| 1.65B | 1.41B | 1.25B | 1.25B | 906.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.30B | 1.27B | 1.19B | 1.56B | 1.78B | Total Assets |
| 11.32B | 10.12B | 9.82B | 12.28B | 10.71B | Total Debt |
| 8.74B | 7.31B | 7.08B | 7.61B | 6.33B | Net Debt |
| 6.44B | 6.03B | 5.89B | 6.04B | 4.55B | 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
Neutral
96.27
Price Trends
99.09
Negative
97.00
Negative
97.15
Negative
Market Momentum
-1.33
Positive
48.43
Neutral
49.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTIS, the sentiment is Neutral. The current price of 96.27 is above the 20-day moving average (MA) of 96.16, below the 50-day MA of 99.09, and below the 200-day MA of 97.15, indicating a neutral trend. The MACD of -1.33 indicates Positive momentum. The RSI at 48.43 is Neutral, neither overbought nor oversold. The STOCH value of 49.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $31.36B | 28.72 | 10.62% | 0.46% | 5.21% | 24.15% | |
70 Outperform | $38.41B | 23.87 | -33.93% | 1.64% | -0.88% | 9.98% | |
70 Outperform | $58.93B | 24.85 | 9.66% | 2.00% | 10.29% | 22.72% | |
68 Neutral | $52.26B | 128.87 | 27.44% | 1.31% | 8.62% | 163.53% | |
67 Neutral | $28.01B | 30.82 | 26.22% | 2.07% | -11.28% | -23.69% | |
67 Neutral | $30.15B | 36.32 | 8.40% | 0.11% | 5.22% | 8.01% | |
63 Neutral | $4.23B | 11.54 | 5.34% | 209.77% | 4.14% | -9.49% |
* Industrials Sector Average
Performance Comparison
OTIS
Otis Worldwide
96.27
6.30
7.00%
EMR
Emerson Electric Company
105.11
0.55
0.53%
ROK
Rockwell Automation
247.68
-17.12
-6.47%
WAB
Westinghouse Air Brake Technologies
184.74
24.96
15.62%
IR
Ingersoll Rand
75.43
-17.49
-18.82%
CARR
Carrier Global
62.54
2.15
3.56%
Otis Worldwide Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: -2.71%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Otis Worldwide Corporation's strong service-driven business model, dividend increase, and achievements in modernization and service growth. However, challenges in new equipment sales, particularly in China and the Americas, and the impact of tariffs weighed on the company's performance. Despite these challenges, the company's strategic initiatives and recognition indicate resilience and a focus on future growth.Q1-2025 Updates
Positive Updates
Five-Year Milestone and Shareholder Returns
Otis Worldwide Corporation celebrated its fifth anniversary as an independent public company, expanding adjusted operating profit margins by 220 basis points and growing adjusted EPS over 70% since 2019. The company has more than doubled its dividend and returned $6 billion of capital to shareholders.
Q1 Financial Performance
Otis Worldwide Corporation reported solid first-quarter results, with service organic sales growth of 4%, modernization orders up 12%, and a 14% increase in the backlog at constant currency. Adjusted EPS grew 5% in the quarter.
Dividend Increase
The company announced an 8% increase in its dividend, bringing the cumulative increase since the spin-off to approximately 110%.
Modernization and Service Growth
Modernization orders grew 12%, with China as a standout performer. The service portfolio grew 4% across all regions, with China showing low teens growth.
Recognition and Awards
Otis Worldwide Corporation was recognized by Fortune as one of the world's most admired companies and was named to Wall Street Journal's best managed companies list.
Negative Updates
New Equipment Sales Decline
Organic sales of new equipment declined 7% in Q1, with significant declines in China and the Americas, partially offset by growth in EMEA and APAC.
China Market Weakness
New equipment orders in China declined by more than 20%, aligning with expectations for market stabilization later in the year.
Tariff Impact
Otis Worldwide Corporation anticipates a negative impact of approximately $45 to $75 million on operating profit in 2025 due to tariffs on products and components imported from China.
Americas New Equipment Downturn
Americas new equipment sales declined by high single digits as the company worked through last year's backlog.
Service Growth Challenges
Service organic sales growth was muted in Q1, with repair growth up only low single digits due to timing of backlog execution.
Company Guidance
During the first quarter of 2025 earnings call for Otis Worldwide Corporation, several key metrics and guidance points were discussed. The company reported flat organic sales, with service sales up 4% offsetting a decline in new equipment sales. Modernization orders saw a 12% increase, and the backlog grew by 14% at constant currency. The maintenance portfolio expanded by 4%, with an adjusted operating margin increasing by 40 basis points, resulting in a 5% growth in adjusted EPS. The company generated $186 million in adjusted free cash flow and executed $250 million in share repurchases. Otis Worldwide announced an 8% dividend increase, bringing the cumulative increase to 110% since its spin-off. The 2025 outlook includes net sales between $14.6 and $14.8 billion, with adjusted operating profit expected to be $2.4 to $2.5 billion, despite anticipated tariff impacts on new equipment operations. Adjusted free cash flow is projected at approximately $1.6 billion, with $800 million earmarked for share repurchases. The company anticipates service organic sales to grow between 5% and 7%, supported by a robust service-driven business model.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.