Otis Worldwide (OTIS) AI Stock Analysis

• Market Cap: $33.57B
• Dividend Yield: 1.88%
• Average Volume (3M): 2.66M
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.50
• Revenue Growth: 0.73%
• EPS Growth: -15.57%
• Country: US
• Employees: 72,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.03
• Shares Outstanding: 389,715,850
• 10 Day Avg. Volume: 4,098,195
• 30 Day Avg. Volume: 2,661,062
• PEG Ratio: -1.79
• Price to Book (P/B): -6.38
• Price to Sales (P/S): 2.38
• P/FCF Ratio: 23.81
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 2.90
• Enterprise Value/Gross Profit: 9.52
• Enterprise Value/Ebitda: 18.16
• 1Y Price Target: $99.00
• Price Target Upside: 13.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 4.39
• Revenue Forecast (FY): $15.21B

• Rating: 64 Neutral
• Price Target: $95.00 ▲(8.99% Upside)

The score is driven primarily by durable profitability and strong, consistent free cash flow plus constructive 2026 guidance led by service/modernization. These positives are weighed down by elevated financial risk from high debt and negative equity, with technicals and valuation both reading as neutral-to-slightly-cautious.

Positive Factors

Large, growing maintenance portfolio

A ~2.5M unit maintenance base that has grown for 14 consecutive quarters provides a durable recurring revenue stream, high service density and cross‑sell opportunities (repairs, modernization). This stabilizes cash flows, supports margins and underpins long‑term organic growth.

Modernization backlog surge

Rapidly growing modernization orders and a +30% backlog create forward revenue visibility in a higher‑margin segment. Modernization demand converts installed base into recurring modernization cycles, boosting sustainable margin expansion and reducing reliance on cyclical new equipment.

Strong cash generation and conversion

Consistent, record FCF and high free‑cash‑flow to net‑income conversion (~90%) underpin durable capital returns and reinvestment capacity. Reliable cash generation supports dividends, buybacks and targeted M&A while providing a buffer versus cyclical revenue swings.

Negative Factors

Negative shareholders' equity and high leverage

Negative equity and elevated leverage reduce financial flexibility, heighten refinancing and covenant risks, and increase sensitivity to interest‑rate rises. This constrains strategic options (bolt‑on M&A, aggressive buybacks) and amplifies downside in slower demand periods.

China structural weakness and churn

Sustained weakness and higher contractual churn in China undermine both new equipment and service retention, limiting lifetime value from that installed base. Regional volatility reduces predictability of service revenues and pressures margin sustainability in a material geographic bucket.

New equipment sales and margin pressure

Weakness and margin compression in new equipment, driven by pricing, tariffs and mix, reduce overall profitability and make earnings more dependent on service/modernization. Protracted low margins in equipment can limit total company margin recovery and cash generation upside.

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

Strong and consistent free cash flow and steady operating margins support quality earnings, but the balance sheet is a major risk due to high debt and persistently negative shareholders’ equity. Net margin also declined in 2025 versus 2024.

Income Statement

Revenue has been fairly stable over the last several years with modest growth in 2023–2025 (2025 revenue up slightly vs. 2024), but growth is not strong or consistent (including a decline in 2022). Profitability remains solid for an industrial business: gross margin has gradually improved (roughly 29% in 2022 to ~30% in 2025) and operating margin has been steady in the mid-teens. A key weakness is the drop in net margin in 2025 (~9.6%) versus 2024 (~11.5%), which suggests higher below-the-line costs or other headwinds despite stable operating profitability.

Balance Sheet

Leverage is the core concern. Total debt remains high (about $8.8B in 2025) and, critically, shareholders’ equity is negative across all periods shown, which weakens balance sheet flexibility and makes equity-based leverage and return measures unfavorable. Total assets have also trended down versus 2021 levels. While the business is profitable, the capital structure increases financial risk and reduces room to absorb shocks compared with peers carrying positive equity and lower leverage.

Cash Flow

Cash generation is a strength. Operating cash flow has been consistently strong and relatively steady (about $1.6B in 2025), and free cash flow remains high (about $1.44B in 2025). Free cash flow has also covered most of net income across years (around ~0.90–0.93 in 2021–2025), indicating earnings quality is supported by cash. The main drawback is that operating cash flow is modest relative to total debt (coverage ratio around ~0.20–0.28 historically and ~0.21 in 2025), meaning deleveraging capacity is solid but not fast given the debt load.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	14.43B	14.26B	14.21B	13.69B	14.30B
Gross Profit	4.40B	4.26B	4.23B	3.94B	4.21B
EBITDA	2.26B	2.23B	2.37B	2.22B	2.30B
Net Income	1.38B	1.65B	1.41B	1.25B	1.25B
Balance Sheet
Total Assets	10.65B	11.32B	10.12B	9.82B	12.28B
Cash, Cash Equivalents and Short-Term Investments	1.10B	2.30B	1.27B	1.19B	1.56B
Total Debt	8.75B	8.74B	7.31B	7.21B	7.79B
Total Liabilities	15.92B	16.04B	14.84B	14.48B	15.26B
Stockholders Equity	-5.39B	-4.85B	-4.92B	-4.87B	-3.63B
Cash Flow
Free Cash Flow	1.44B	1.44B	1.49B	1.45B	1.59B
Operating Cash Flow	1.60B	1.56B	1.63B	1.56B	1.75B
Investing Cash Flow	-406.00M	-239.00M	-183.00M	-33.00M	-89.00M
Financing Cash Flow	-2.42B	-234.00M	-1.35B	-3.65B	58.00M

Otis Worldwide Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 87.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 87.16 is below the 20-day moving average (MA) of 89.16, below the 50-day MA of 88.30, and below the 200-day MA of 91.02, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 43.73 is Neutral, neither overbought nor oversold. The STOCH value of 29.31 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	80 Outperform	$120.16B	34.72	25.79%	0.79%	0.22%	26.66%
ITW	77 Outperform	$76.65B	25.19	93.75%	2.43%	-0.41%	-10.88%
ROK	71 Outperform	$48.25B	55.98	24.24%	1.33%	0.98%	-7.51%
EMR	69 Neutral	$83.50B	36.73	10.91%	1.58%	2.97%	18.14%
IR	69 Neutral	$35.14B	65.98	5.35%	0.10%	4.20%	-34.47%
OTIS	64 Neutral	$33.57B	24.61	―	1.88%	0.73%	-15.57%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Otis Worldwide Corporate Events

Otis Worldwide Appoints Enrique Miñarro Viseras as COO

On January 13, 2026, Otis Worldwide’s board appointed Enrique Miñarro Viseras as Chief Operating Officer, effective January 16, 2026, following his tenure as President of Otis EMEA and later Otis EMEA & Latin America since October 2023 and his prior senior leadership roles at Ingersoll Rand. In connection with the promotion, the company approved a new compensation package that raises his base salary to $820,000, increases his short-term incentive target to 120% of salary, and makes him eligible for an annual equity award targeted at $3.5 million from fiscal 2026, signaling Otis’s commitment to retaining and incentivizing top leadership as it strengthens its global operational management structure.

The most recent analyst rating on (OTIS) stock is a Buy with a $116.00 price target. To see the full list of analyst forecasts on Otis Worldwide stock, see the OTIS Stock Forecast page.