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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.

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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 Q3 2025 Earnings: A Strong Service-Driven Performance

Otis Worldwide reported a robust third quarter, with net sales reaching $3.7 billion and organic sales growing 2%. The company's adjusted operating profit margin expanded by 20 basis points, driven by a 70 basis point expansion in the Service segment to 25.5%. Adjusted earnings per share (EPS) grew 9% to $1.05, beating analyst estimates of $1.01. The strong operational performance was fueled by a 6% increase in Service organic sales and a 14% growth in Modernization organic sales.

Publication Date: Oct -30

📋 Highlights
  • Service Segment Growth:: Organic sales increased 6%, with operating profit margins expanding 70bps to 25.5%, driving 9% adjusted EPS growth.
  • Modernization Momentum:: Orders surged 27%, backlog rose 22%, and sales grew 14% organically, reflecting strong demand for upgrades.
  • Free Cash Flow Strength:: Sequentially improved to $337M in Q3, with full-year guidance of ~$1.45B and $700M expected in Q4.
  • Service Portfolio Expansion:: Maintenance portfolio on track to reach 2.5M units by year-end, growing 4% organically year-to-date.
  • Margin Expansion:: Adjusted operating profit margin expanded 20bps overall, with Service leading 70bps of the improvement to $2.4–2.5B annual guidance.

Segment Performance

The Service segment continued to drive growth, with a 6% increase in organic sales and a 70 basis point expansion in operating profit margin. The Maintenance portfolio grew 4%, and the company is on track to approach 2.5 million units in its service portfolio by year-end. Modernization order growth accelerated to 27%, and backlog increased 22%. New Equipment orders grew 4%, returning to growth for the first time since the fourth quarter of 2023.

Cash Flow and Capital Allocation

Adjusted free cash flow increased sequentially to $337 million, giving the company a good line of sight to deliver its adjusted free cash flow outlook of approximately $1.45 billion for the full year. The company opportunistically completed approximately $250 million in share repurchases during the third quarter, bringing the year-to-date total to approximately $800 million.

Outlook and Valuation

The company expects its Service segment to continue driving full-year revenue and profit growth, with total net sales anticipated to be between $14.5 billion and $14.6 billion. The adjusted operating profit outlook is $2.4 billion to $2.5 billion. With a current P/E Ratio of 27.11 and an EV/EBITDA of 19.7, the market appears to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 4.9%, which may be achievable given the company's strong Service-driven performance and growing Modernization backlog.

Return on Investment and Debt

The company's ROIC is 38.93%, indicating a strong return on invested capital. However, the ROE is -25.95%, which may be a concern. The Net Debt / EBITDA ratio is 3.4, suggesting a moderate level of debt. The company's Free Cash Flow Yield is 3.61%, which is a positive sign.

3. NewsRoom

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Groupe la Francaise Has $5.09 Million Stake in Otis Worldwide Corporation $OTIS

Dec -04

Source: defenseworld.net

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Capital Fund Management S.A. Boosts Stake in Otis Worldwide Corporation $OTIS

Nov -28

Source: defenseworld.net

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When Markets Bleed, Dividends Lead: 2 Stocks With Strong Upside Long-Term

Nov -26

Source: seekingalpha.com

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ICARO Media Group Enters New Multiyear Digital Network Deal with Elevator Giant Otis in Spain, Portugal and Africa

Nov -25

Source: globenewswire.com

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Aviso Financial Inc. Boosts Position in Otis Worldwide Corporation $OTIS

Nov -25

Source: defenseworld.net

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Otis Worldwide Corporation $OTIS Shares Sold by Bank Julius Baer & Co. Ltd Zurich

Nov -22

Source: defenseworld.net

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Expanded Otis Gen3 Core™ Elevator Offers Larger Cabs, More Lifting Capacity for Growing 2-8 Story Building Segment in the U.S. and Canada

Nov -19

Source: prnewswire.com

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Banco Bilbao Vizcaya Argentaria S.A. Has $831,000 Position in Otis Worldwide Corporation $OTIS

Nov -18

Source: defenseworld.net

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: 5.4/10

Value: 1.7

Growth: 6.1

Quality: 8.1

Yield: 1.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

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Emerson Electric

A-Score: 5.3/10

Value: 2.4

Growth: 3.1

Quality: 6.5

Yield: 4.0

Momentum: 7.0

Volatility: 8.7

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Roper Technologies

A-Score: 5.0/10

Value: 2.6

Growth: 5.7

Quality: 7.4

Yield: 1.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Dover

A-Score: 4.9/10

Value: 3.7

Growth: 4.9

Quality: 7.4

Yield: 2.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Otis

A-Score: 4.9/10

Value: 4.4

Growth: 4.4

Quality: 5.7

Yield: 3.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Ingersoll Rand

A-Score: 4.3/10

Value: 1.8

Growth: 7.6

Quality: 6.6

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

86.45$

Current Price

86.45$

Potential

0.00%

Expected Cash-Flows