Download PDF

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on OTIS

The recent 3-month performance of Otis Worldwide Corporation was negatively driven by persistent headwinds, particularly in China and the New Equipment segment. The company's Q2 earnings miss and revised 2025 outlook triggered a steep sell-off, with weak demand and tariffs contributing to the decline. Additionally, the recent miss on revenues has led to a valuation re-rating, bringing the stock close to its fair value of $80 per share.

1.c. Company Highlights

2. Otis Worldwide's Strong Q4 2025 Earnings: A Service-Driven Success Story

Otis Worldwide Corporation reported a robust fourth quarter 2025, with organic sales growth of 1%, driven by a 5% service growth, including a 9% modernization growth. The company's service operating profit reached $638 million, a $49 million increase at constant currency, with operating profit margins expanding 100 basis points to 25.5%. Earnings per share (EPS) came in at $1.03, slightly below estimates of $1.04. Revenue growth was driven by the company's service-driven business model, with a record modernization backlog and a growing maintenance portfolio.

Publication Date: Feb -02

📋 Highlights
  • Service and Modernization Growth:: Organic sales grew 1% in Q4 2025, driven by 5% service growth (9% modernization growth), with service portfolio reaching 2.5 million units.
  • Backlog Expansion:: Total backlog increased 8% at constant currency (14% excluding China), with modernization backlog conversion faster than new equipment.
  • Profit Margin Expansion:: Service operating profit reached $638M (+$49M), with margins expanding 100 bps to 25.5%, the strongest margin expansion of 2025.
  • 2026 Outlook:: Organic sales expected to grow low to mid-single digits, with service growth 6-8% (driven by modernization) and adjusted operating profit of $660M–$700M at constant currency.
  • China Market Dynamics:: New equipment sales in China projected to decline 8% in 2026 (vs. 15% in 2025), while service and modernization show stabilization and growth potential.

Segment Performance

The company's orders performance was strong, with combined new equipment and modernization orders increasing 10% during the quarter. The total backlog at constant currency grew 8%, and when excluding China, the increase was 14%. New equipment orders at constant currency declined 2% in the quarter. The service portfolio grew 4% in 2025, bringing it to approximately 2.5 million units and strengthening Otis' leading position globally.

Guidance and Outlook

Otis expects total organic sales to increase low to mid-single digits in 2026, driven by accelerating growth in its service segment. The company anticipates mid- to high-single digit growth in service, with acceleration in both maintenance and repair and modernization. Adjusted operating profit is expected to grow $660 million to $1 billion at constant currency, with service margins expected to expand 100 basis points year over year. As Cristina Mendez noted, "We anticipate Asia to decline in 2026, with the pace of decline moderating in China." This guidance suggests a continued focus on service-driven growth.

Valuation Metrics

With a P/E Ratio of 24.3, EV/EBITDA of 17.88, and a Dividend Yield of 1.93%, Otis' valuation appears reasonable. Analysts estimate revenue growth at 5.0% next year, which is in line with the company's guidance. The company's ROIC of 40.74% indicates strong profitability. However, the ROE of -25.98% is a concern, potentially due to one-time items or accounting adjustments. Overall, Otis' valuation metrics suggest that the market has priced in a moderate growth outlook, but the company's strong service-driven business model and guidance for 2026 suggest potential for upside.

3. NewsRoom

Card image cap

Allied Investment Advisors LLC Raises Stock Position in Otis Worldwide Corporation $OTIS

Feb -02

Source: defenseworld.net

Card image cap

Bank of New York Mellon Corp Has $274.33 Million Stock Holdings in Otis Worldwide Corporation $OTIS

Jan -30

Source: defenseworld.net

Card image cap

Otis Declares Quarterly Dividend of $0.42 per Share

Jan -29

Source: prnewswire.com

Card image cap

Otis Worldwide Corp (OTIS) Q4 2025 Earnings Call Highlights: Record Cash Flow and Modernization Surge Amidst New Equipment Challenges

Jan -28

Source: gurufocus.com

Card image cap

Otis Worldwide Corporation (OTIS) Q4 2025 Earnings Call Transcript

Jan -28

Source: seekingalpha.com

Card image cap

Otis Worldwide Q4 Earnings Meet Estimates, Sales Miss, Stock Down

Jan -28

Source: zacks.com

Card image cap

Otis Worldwide (OTIS) Reports Q4 Earnings: What Key Metrics Have to Say

Jan -28

Source: zacks.com

Card image cap

Otis Worldwide (OTIS) Q4 Earnings Match Estimates

Jan -28

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.44%)

6. Segments

Service

Expected Growth: 4.4%

Otis Worldwide Corporation’s growth is driven by increasing urbanization, ageing infrastructure, and rising demand for energy-efficient solutions, alongside growing investments in the commercial and residential construction sectors.

New Equipment

Expected Growth: 4.5%

Otis Worldwide Corporation’s new equipment introduction will drive growth, fueled by increasing demand for energy-efficient and sustainable infrastructure, urbanization, and government initiatives supporting green infrastructure development.

7. Detailed Products

Elevators

Otis Worldwide Corporation designs, manufactures, and installs elevators for residential and commercial buildings, including high-rise buildings, offices, hotels, and hospitals.

Escalators

Otis provides escalators for shopping malls, airports, train stations, and other public transportation hubs, designed for high-traffic areas.

Moving Walks

Otis offers moving walks, also known as autowalks, for airports, train stations, and other public transportation hubs, designed for high-traffic areas.

Modernization Services

Otis provides modernization services to upgrade and refurbish existing elevators, escalators, and moving walks, improving safety, efficiency, and reliability.

Maintenance and Repair Services

Otis offers maintenance and repair services to ensure the safe and efficient operation of elevators, escalators, and moving walks.

New Equipment Installation

Otis designs, manufactures, and installs new elevators, escalators, and moving walks for new construction projects and building renovations.

8. Otis Worldwide Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Otis Worldwide Corporation is moderate due to the presence of alternative products and services in the elevator and escalator industry.

Bargaining Power Of Customers

The bargaining power of customers is low for Otis Worldwide Corporation due to the company's strong brand reputation and the lack of price sensitivity among its customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Otis Worldwide Corporation due to the presence of multiple suppliers in the market and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low for Otis Worldwide Corporation due to the high barriers to entry in the elevator and escalator industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Otis Worldwide Corporation due to the presence of several established players in the market, leading to intense competition and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 306.63%
Debt Cost 3.95%
Equity Weight -206.63%
Equity Cost 8.57%
WACC -5.61%
Leverage -148.40%

11. Quality Control: Otis Worldwide Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
AMETEK

A-Score: 5.3/10

Value: 1.8

Growth: 5.8

Quality: 7.7

Yield: 1.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Emerson Electric

A-Score: 5.1/10

Value: 2.2

Growth: 4.1

Quality: 6.2

Yield: 4.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Dover

A-Score: 5.1/10

Value: 3.2

Growth: 4.9

Quality: 7.2

Yield: 2.0

Momentum: 4.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Otis

A-Score: 5.1/10

Value: 4.4

Growth: 4.4

Quality: 5.5

Yield: 3.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Roper Technologies

A-Score: 5.0/10

Value: 3.0

Growth: 5.6

Quality: 7.4

Yield: 1.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Ingersoll Rand

A-Score: 4.2/10

Value: 2.1

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

87.16$

Current Price

87.16$

Potential

0.00%

Expected Cash-Flows