Otis Worldwide Faces Challenges Amid Market Gains
Company Struggles to Keep Up with Industry Competitors
Otis Worldwide Corporation (OTIS), based in Farmington, Connecticut, focuses on manufacturing, installing, and servicing elevators and escalators in the U.S., China, and other markets worldwide. The company holds a market capitalization of $39.9 billion and operates via its New Equipment and Service segments.
Recent Performance Lags Behind Broader Markets
Over the last year, Otis has struggled relative to the broader market. In the past 52 weeks, OTIS shares increased by 17.7%, which is significantly behind the S&P 500 Index’s ($SPX) 31.1% gain. For 2024, OTIS is up 11.7%, in contrast to the SPX’s 24.7% increase on a year-to-date basis.
Underperforming Compared to Industry Sector
When looking more closely, OTIS has failed to keep pace with the Industrial Select Sector SPDR Fund’s (XLI) return of 32.9% over the same timeframe, as well as its 23.4% gain year to date.
Disappointing Q3 Earnings Reports
On October 30, Otis Worldwide reported its Q3 earnings, leading to a 3.1% drop in its shares. The company failed to meet both revenue and profit consensus estimates.
Financial Projections and Mixed Analyst Opinions
For the current fiscal year ending in December, analysts predict Otis Worldwide will achieve an EPS growth of 8.8%, reaching $3.85. However, its earnings surprise history is inconsistent. The company managed to exceed consensus estimates in three of the last four quarters but missed in one instance.
Among 11 analysts covering OTIS stock, the consensus rating stands at “Moderate Buy,” based on two “Strong Buy” ratings, one “Moderate Buy,” and eight “Holds.”
Changing Analyst Ratings
This current outlook is less optimistic than two months ago, when three analysts rated the stock as a “Strong Buy.”
New Coverage and Price Targets
On November 13, UBS Group AG (UBS) began coverage on Otis Worldwide with a “neutral” rating, setting a price target of $113.
Currently, OTIS has a mean price target of $103.10, reflecting a premium of 3.2% based on its current share price. The highest target among analysts at $113 presents a potential upside of 13.1%.
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 are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
