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Otis Worldwide (OTIS)
NYSE:OTIS
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Otis Worldwide
(NYSE:OTIS)68Neutral
Positive Factors
Orders Growth
Americas Q4 orders increased by 15%, sustaining double-digit growth for the second consecutive quarter.
Service Growth
Service growth accelerated, with repair strength expected to continue, supporting top-line growth and margin expansion.
Negative Factors
China Market Challenges
Persistent China headwinds are weighing on new equipment volume and margin estimates.
Otis Worldwide (OTIS) vs. S&P 500 (SPY)
Market Cap
$40.19B
Dividend Yield1.52%
Average Volume (3M)2.41M
Price to Earnings (P/E)24.9
Beta (1Y)0.84
Revenue Growth0.37%
EPS Growth19.87%
CountryUS
Employees72,000
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)4.07
Shares Outstanding396,518,550
10 Day Avg. Volume3,022,123
30 Day Avg. Volume2,414,049
Financial Highlights & Ratios
PEG Ratio1.25
Price to Book (P/B)N/A
Price to Sales (P/S)2.85
Price to Cash Flow (P/CF)14.70
P/FCF Ratio14.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$100.67Price Target Upside-3.21% Downside
Rating ConsensusHold
Number of Analyst Covering6
Otis Worldwide Business Overview & Revenue Model
Company DescriptionOtis Worldwide Corporation (OTIS) is a leading global provider in the vertical transportation industry, primarily focused on the design, manufacturing, installation, and maintenance of elevators, escalators, and moving walkways. The company serves a wide range of customers including residential and commercial buildings, infrastructure projects, and industrial applications. With a strong emphasis on innovation and safety, Otis delivers cutting-edge solutions that enhance the efficiency and reliability of people movement systems.
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 Financial Statement Overview
Summary
Otis Worldwide exhibits strong revenue performance and cash flow generation capabilities. However, the balance sheet raises concerns with substantial leverage and negative equity, implying financial risk. The company maintains profitability, but operational efficiencies should be monitored given declining EBIT and EBITDA margins.Income Statement
Otis Worldwide shows a stable revenue trend with a slight increase in TTM revenue compared to the previous year. The gross profit margin for the TTM is approximately 48.1%, indicating strong profitability. The net profit margin stands at about 11.5%, which is healthy, though EBIT and EBITDA margins have slightly decreased over the years, suggesting some operational efficiency concerns.75
Positive
Balance Sheet
The company's balance sheet is a concern with a negative stockholders' equity, indicating liabilities exceed assets. The debt-to-equity ratio is not calculable due to negative equity, but the high total debt level indicates significant leverage. The equity ratio is negative, reflecting financial instability and potential risk in funding operations through debt.50
Neutral
Cash Flow
Otis demonstrates strong cash flow generation with a positive free cash flow trend over the years. The operating cash flow to net income ratio is robust, indicating efficient cash conversion. However, free cash flow growth has been modest, suggesting limited expansion in cash-generating capacity.70
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
Positive
104.01
Price Trends
95.62
Positive
97.80
Positive
96.65
Positive
Market Momentum
1.79
Negative
71.20
Negative
91.85
Negative
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 104.01 is above the 20-day moving average (MA) of 98.70, above the 50-day MA of 95.62, and above the 200-day MA of 96.65, indicating a bullish trend. The MACD of 1.79 indicates Negative momentum. The RSI at 71.20 is Negative, neither overbought nor oversold. The STOCH value of 91.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $53.52B | 30.96 | 9.80% | 1.82% | -4.53% | -14.72% | |
74 Outperform | $65.60B | 27.67 | 9.66% | 1.81% | 10.29% | 22.72% | |
70 Outperform | $56.48B | 139.26 | 27.44% | 1.22% | 8.62% | 163.53% | |
68 Neutral | $40.19B | 24.92 | -33.93% | 1.52% | 0.37% | 19.87% | |
68 Neutral | $137.06B | 24.27 | 33.10% | 2.09% | 5.05% | 2.73% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
OTIS
Otis Worldwide
104.01
9.24
9.75%
EMR
Emerson Electric Company
118.61
10.91
10.13%
HON
Honeywell International
214.52
18.39
9.38%
JCI
Johnson Controls
80.06
20.10
33.52%
CARR
Carrier Global
67.39
10.94
19.38%
Otis Worldwide Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: 8.92% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment. While the company showcased strong service performance and successful strategic initiatives like the UpLift program, challenges in the China market and declines in New Equipment orders and profits present notable headwinds.Highlights
Strong Service Performance
Service segment grew 7.8% in the fourth quarter and accounted for 93% of overall operating profit in 2024. Maintenance portfolio increased more than 4% for the third consecutive year, with a total of 2.4 million units.
Modernization Growth
Modernization orders grew 18% in Q4, with backlog up 13% at constant currency. This includes over 20% growth in Asia Pacific each quarter.
Adjusted Free Cash Flow
Otis generated $682 million of adjusted free cash flow in Q4 2024, the highest quarterly result since spin, driven by excellent collections and reduction in net working capital.
UpLift Program Success
The UpLift program is expected to deliver $200 million in annual run rate savings by the second half of 2025, with approximately $70 million of savings achieved in 2024.
Positive Developments in Americas and Asia Pacific
New Equipment orders increased approximately 11% excluding China, with strong performance in the Americas (mid-teens growth in Q4) and Asia Pacific (greater than 20% growth).
ESG Recognition
Received a gold rating from EcoVadis for the third consecutive year, reflecting strong ESG initiatives aligned with business strategy.
Lowlights
Decline in New Equipment Orders
New Equipment orders declined 4% in Q4, primarily due to challenging market conditions in China, where orders fell more than 20%.
China Market Challenges
China New Equipment sales declined greater than 20% in Q4 due to a backlog down mid-teens and continued soft demand. The market is expected to decline approximately 10% in 2025.
New Equipment Operating Profit Decline
New Equipment operating profit was down $24 million at constant currency for Q4 and down $44 million for the full year, driven by lower volume and unfavorable mix.
EMEA Weakness
EMEA New Equipment orders declined by high-single-digits in Q4, particularly in Western Europe, although the full year was up 3.7%.
Company Guidance
In the fourth quarter of 2024, Otis reported an organic sales growth of 1.9%, largely driven by a 7.8% increase in the Service segment, which includes Maintenance, Repair, and Modernization. The company's Maintenance portfolio grew by over 4% for the third consecutive year, reaching approximately 2.4 million units. Modernization orders surged by 18% in the quarter, contributing to a 13% increase in backlog at constant currency. Despite challenges in the New Equipment market, primarily in China where orders fell over 20%, Otis maintained its overall new equipment market share at 20% and achieved an adjusted EPS growth of 8.2%. The company generated $682 million of adjusted free cash flow, its highest quarterly result since its spin-off, and returned $1.6 billion to shareholders through dividends and share repurchases. Looking ahead, Otis aims to leverage its Service-driven business model to continue expanding margins and expects to achieve $200 million in annual run-rate savings from its UpLift program by the second half of 2025.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.