OTIS
Otis Worldwide Corporation$91.71
Unclear
Target $92.85
Report: Mar 07, 2026Industrials • Industrial - Machinery • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$91.71+1.2%
Rec: UnclearConviction: Medium
Entry Target
$71.42
(22% below current)
Fair Value
$92.85
(1% above current)
Stop Loss
$73.32
(20% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$105.95
52 Week Low$75.27
Avg. 3 Month Volume3.86M
Efficiency
LTM Gross Margin30.3%
LTM EBITDA Margin15.5%
LTM EBIT Margin14.3%
LTM Operating Margin15.5%
LTM ROA12.8%
LTM ROE-26.0%
LTM ROIC24.0%
LTM ROCE61.3%
Capital Structure
Market Cap (MM)$30.0B
Enterprise Value (MM)$37.2B
Shares Outstanding392.80M
Total Debt (MM)$8.35B
Cash & Equivalents (MM)$1.10B
LTM Net Debt (MM)$7.26B
LTM Net Debt/EBITDA3.2x
Growth
TTM Rev. Growth1.2%
Last 3-Yr Rev. CAGR1.8%
Last 3-Yr EBITDA CAGR2.0%
Last 3-Yr EPS CAGR5.7%
Valuation
Street Target Price$97.75
LTM EV/Revenue2.6x
LTM EV/Gross Profit8.5x
LTM EV/EBIT18.1x
LTM EV/EBITDA16.7x
LTM P/E21.6x
LTM EV/FCF24.7x
LTM P/FCF19.9x
LTM P/TB3.5x
LTM P/B-5.6x
Dividend Yield2.1%
Payout Ratio46.9%
Executive SummarySituation: Current price is $91.71 versus fair value $92.85 (1.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Modernization Backlog Conversion The conversion of the $19.1 billion RPO, specifically the 30% YoY growth in modernization orders, is the most critical driver for near-term revenue acceleration and margin expansion. Bear case centers on Structural China Decline A permanent impairment of the Chinese property sector could lead to sustained double-digit declines in New Equipment sales, dragging down overall corporate margins and growth. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The service flywheel is accelerating, with 1.1 million Otis ONE units driving high-margin subscription growth and a 30% YoY increase in the modernization backlog. Management has demonstrated a history of consistent execution, delivering 14 consecutive quarters of maintenance portfolio growth.
Bear Case
The structural decline of the Chinese property market (New Equipment down 20%) creates a persistent drag that service growth may not fully offset. High financial leverage (3.2x Net Debt/EBITDA) and negative tangible book value leave the company with a thin margin for error if interest rates rise or cash flow falters.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Modernization Backlog Conversion The conversion of the $19.1 billion RPO, specifically the 30% YoY growth in modernization orders, is the mo...
Near-Term (0-6 months)Impact: Moderate
Otis ONE Monetization Scaling the IoT platform from 1.1 million to 1.5 million units will drive high-margin recurring subscription revenue a...
Long-Term (18+ months)Impact: Moderate
Otis is at a critical juncture as it completes its 'UpLift' transformation and navigates a generational shift in the Chinese property market...
Primary Risks
Concern: High
Structural China Decline A permanent impairment of the Chinese property sector could lead to sustained double-digit declines in New Equipmen...
Concern: Medium
Financial Leverage and Negative Equity The reliance on debt-financed buybacks has resulted in a $7.3 billion net debt load and negative tang...
Concern: Medium
Stewardship is currently in a 'Maintenance' phase. While the board is highly independent and features strong industrial expertise (e.g., Aud...
Recent Activity
2025-07-23SEC Filing (8-K)
-12.38%Otis Worldwide Corporation reported second quarter 2025 results with mid-single digit organic Service sales growth and continued Service operating profit margin expansion.
2025-04-23SEC Filing (8-K)
-6.72%Otis Worldwide Corporation reported first quarter 2025 results with mid-single digit organic Service sales growth and strong Service operating profit margin expansion.
2025-04-04Market Movement
-8.95%Market/Sector Move -8.95%
2024-07-24SEC Filing (8-K)
-7.06%Otis Worldwide Corporation reported second quarter 2024 results with continued strong Service performance leading to mid-teens EPS growth.
2022-07-27SEC Filing (8-K)
+5.12%Otis Worldwide Corporation reported Q2 2022 results with solid performance despite headwinds
Valuation Table
9.8/10Decision Grade
Scenario Range
$73
Bear
$115
Bull
$92