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Farmington, Connecticut-based Otis Worldwide Corporation (OTIS) engages in the manufacturing, installation, and servicing of elevators and escalators in the US, China, and internationally. With a market cap of $37.5 billion, Otis Worldwide operates through New Equipment and Service segments.
The elevator manufacturer has underperformed the broader market over the past year. Over the past 52 weeks, OTIS gained 12.5%, lagging behind the S&P 500 Index’s ($SPX) 27.8% returns. In 2024, OTIS is up 5% compared to SPX’s 17.8% gains on a YTD basis.
Narrowing the focus, OTIS has also underperformed the S&P 500 Industrial Sector SPDR’s (XLI) 20.8% returns over the past 52 weeks and 12.4% gains on a YTD basis.
Shares of Otis Worldwide plummeted 7.1% following the release of its Q2 earnings on Jul. 24. The company’s net sales declined 3.2% annually to $3.6 billion while missing the consensus estimates. Moreover, it projects full-year revenue to be between $14.3 billion and 14.5 billion, which represents a slight growth from $14.2 billion reported in the previous fiscal.
Despite the dip in sales, Otis Worldwide reported a 15.2% annual growth in adjusted EPS to $1.06, which surpassed the consensus estimates by 2.9%.
For the current fiscal year, ending in December, analysts expect Otis Worldwide to report an EPS growth of 9.6% annually to $3.88. Moreover, the company’s earnings surprise history is robust. It beat the consensus estimates in all of the last four quarters.
Among the 10 analysts covering the OTIS stock, the consensus rating is a “Moderate Buy.” That’s based on three “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This configuration has been stable over the past months.
On Aug. 19, Wells Fargo (WFC) analyst Joe O’Dea maintained a “Hold” rating with a price target of $95.
OTIS’ mean price target of $99.25 represents a premium of 5.6% from current price levels. The street-high target of $110 indicates a potential upside of 17.1%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
