Otis Worldwide Corporation (OTIS)
Valuation Overview•Is Otis Worldwide Corporation Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Moderate quality score of 52/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This outlook is strongly supported by highly attractive capital returns, driven by a balanced mix of reliable dividends and share buybacks.
OTIS demonstrates adequate business quality with stable profitability. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company exhibits steady, low-single-digit revenue growth paired with stable bottom-line earnings. The company maintains healthy operational efficiency with a 15.4% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $3.6B | +1.2% | +1.8% | +2.5% | — | |
| EBITDA | $580.0M | — | +1.2% | — | — | |
| Net Income | $340.0M | -15.9% | +3.4% | — | — | |
| EPS (Diluted) | $0.87 | -14.0% | +5.7% | +11.0% | — | |
| Free Cash Flow | $380.0M | +0.5% | -0.0% | +2.2% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 30.4% | 29.9% | 29.5% | 29.5% |
| Operating Margin | 15.4% | 14.7% | 14.8% | 14.5% |
| Net Margin | 10.1% | 10.3% | 9.8% | 8.6% |
| FCF Margin | 11.4% | 10.2% | 10.5% | 10.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.91 | $0.89 | -2.2% | ||
| Q1'26 | $1.04 | $1.03 | -1.0% | ||
| Q4'25 | $1.01 | $1.05 | +4.0% | ||
| Q3'25 | $1.03 | $1.05 | +1.9% | ||
| Q2'25 | $0.90 | $0.92 | +2.7% | ||
| Q1'25 | $0.95 | $0.93 | -2.1% | ||
| Q4'24 | $0.97 | $0.96 | -1.0% | ||
| Q3'24 | $1.03 | $1.06 | +2.9% |
Total return is -21.6% (1Y), lagging the benchmark by -46.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -16.1% | -25.4% | — |
| 1Y | -21.6% | -46.6% | +1.8% |
| 3YCAGR | -3.6% | -23.4% | +5.4% |
| 5YCAGR | +0.2% | -12.7% | +8.7% |
| 10YCAGR | +6.0% | -7.7% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Otis Worldwide Corporation (OTIS) valuation, health, and returns.
Otis Worldwide Corporation is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. trading near fair value (DCF: $75.51)
Otis Worldwide Corporation has multiple valuation anchors: DCF Intrinsic Value: $75.51 | Peer Relative Fair Value: $126.38 | Wall Street Analyst Target: $93.00 (implying +26.9% upside). A convergence of these signals offers higher conviction.
Otis Worldwide Corporation displays fair financial health with a composite quality score of 52/100, supported by a Altman Z-Score of 2.0 (grey zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 78.1%.
Otis Worldwide Corporation pays a 2.2% dividend yield, covered by a 47% payout ratio with 5 years of growth, supplemented by a 2.8% buyback yield.
Otis Worldwide Corporation's current growth trajectory is Stable. The company achieved +1.2% 1Y revenue growth and -14.0% 1Y EPS growth, compared to its 3Y revenue CAGR of +1.8%.
Wall Street consensus is Hold based on 13 analysts, beating EPS expectations in 67% of recent quarters with a -2-quarter streak. The consensus price target represents a +26.9% change from current levels.
Investment risks for Otis Worldwide Corporation include: -31.4% 1-year max drawdown. Volatility risk is characterized by a beta of 0.35x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.