Otis Worldwide Prepares for Q1 Earnings Release Amid Stock Decline

Otis Worldwide Corporation (OTIS), valued at $36.5 billion, is a significant player in the global elevator and escalator market. Based in Farmington, Connecticut, the company manages a vast service portfolio, consisting of over 2 million units globally. Otis offers advanced mobility solutions, including the Gen2 system and the Gen360 elevator, which enhance efficiency and performance in modern buildings.

Q1 Earnings Forecast and Recent Performance

Otis is set to announce its Q1 earnings results on Wednesday, April 23. Analysts anticipate the company will report a profit of $0.91 per share, reflecting a 3.4% rise from $0.88 per share in the same quarter last year. Over the past four quarters, Otis has exceeded Wall Street’s earnings expectations in two instances, while falling short in two others. In its most recent quarter, OTIS missed the consensus EPS estimate by 2.1%, largely due to higher operational costs and foreign exchange challenges.

Future Outlook for EPS and Market Challenges

Looking ahead, analysts project that for fiscal 2025, Otis will report an EPS of $4.04, a 5.5% increase from $3.83 in fiscal 2024. Additionally, the EPS is expected to grow at an annual rate of 9.4%, reaching $4.42 in fiscal 2026.

Stock Performance Compared to Market

Over the past year, shares of Otis Worldwide have dropped by 7.3%, while the S&P 500 Index ($SPX) experienced a decline of 4.2%, and the Industrial Select Sector SPDR Fund (XLI) fell by 7.2% during the same timeframe.

Recent Quarterly Results and Expectations

After releasing its fourth-quarter results on January 29, Otis Worldwide’s stock decreased by 1.3%. The company’s net sales increased by 1.5% year-over-year to $3.7 billion, aided by a 7.6% rise in service sales, exceeding market expectations by 72 basis points. The adjusted operating margin improved by 30 basis points, reaching 15.9%, due to positive performance in the service segment.

As Otis looks towards 2025, it expects to face ongoing challenges in the new equipment sector, particularly in China, where a decrease of approximately 10% is forecasted.

Analysts’ Ratings and Price Target

The consensus view among analysts for Otis Worldwide’s Stock is cautious, holding an overall “Hold” rating. Of the ten analysts monitoring the Stock, one rates it as “Strong Buy,” one as “Moderate Buy,” six as “Hold,” and two as “Strong Sell.”

The average price target stands at $101.60, suggesting a potential upside of 11.8% from current price levels.

On the date of publication, Kritika Sarmah did not hold (directly or indirectly) any positions in the securities mentioned in this article. All information and data herein are for informational purposes. For more information, please view the Barchart Disclosure Policy here.

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