Farmington, Connecticut-based Otis Worldwide Corporation (OTIS) is a global leader in elevator, escalator, and moving walkway manufacturing, installation, and servicing. Valued at $34 billion by market cap, the company operates in more than 200 countries and moves over 2.4 billion people daily, servicing about 2.4 million customer units worldwide.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and OTIS perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty industrial machinery industry. Otis generates revenue through both new equipment sales and a large recurring service and maintenance business, which provides stable cash flow and long-term customer relationships. With strong brand recognition, engineering expertise, and a massive installed base, Otis remains a dominant force in the vertical-transportation industry.
Despite its notable strength, OTIS slipped 18.6% from its 52-week high of $106.83, achieved on Mar. 10. Over the past three months, OTIS stock surged 1.5%, underperforming the Industrial Select Sector SPDR Fund's (XLI) 2.9% gainduring the same time frame.
In the longer term, shares of OTIS dipped 6.1% on a YTD basis and fell 14% over the past 52 weeks, underperforming DOWI’s YTD gains of 6.9% and 11.7% returns over the last year.
To confirm the bearish trend, OTIS has been trading below its 200-day moving average since late July and under its 50-day moving average since mid-November.
On Oct. 29, Otis shares climbed 2.3% after the company delivered Q3 results. Net sales rose 4% year over year to $3.7 billion, beating consensus estimates by 1.1%, while adjusted EPS increased 9.4% from the prior-year period to $1.05, about 5% ahead of analyst expectations. The quarter’s solid performance was driven by robust organic service-sales growth and meaningful expansion in service operating margins, underscoring the strength of Otis’s high-margin service business.
In the competitive arena of specialty industrial machinery, Schindler Holding AG (SHLRF) has taken the lead over OTIS, showing resilience with a 17.2% uptick on a YTD basis and 21.3% gains over the past 52 weeks.
Wall Street analysts are cautious on OTIS’ prospects. The stock has a consensus “Hold” rating from the 13 analysts covering it, and the mean price target of $102.37 suggests a potential upside of 17.7% from current price levels.
On the date of publication, Kritika Sarmah 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.
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