Make better investment decisions with Simply Wall St’s easy, visual tools that give you a competitive edge.
Otis Worldwide (OTIS) has been on many investors’ watchlists after recent share price pressure, with the stock showing negative returns over the past month and over the past 3 months despite its long operating history.
See our latest analysis for Otis Worldwide.
At the latest share price of $85.42, Otis Worldwide has seen recent pressure, with a 7 day share price return of 6.11% and a 90 day share price return of 7.91%, while the 1 year total shareholder return of 8.88% contrasts with a 5 year total shareholder return of 44.05%. This points to fading momentum after stronger earlier years and suggests the market may be reassessing its growth prospects or risk profile.
If Otis’s recent pullback has you rethinking your watchlist, this could be a useful moment to broaden your search with aerospace and defense stocks as another corner of the market to review.
So with recent share price pressure, ongoing revenue and net income growth, and a value score of 5, is Otis trading at a discount that leaves upside on the table, or is the market already pricing in future growth?
Based on the most followed narrative, Otis Worldwide’s fair value of $105.18 sits well above the last close at $85.42. This frames a valuation gap that rests on specific growth and margin assumptions.
Significant cost saving initiatives, including the UpLift and China transformation programs, are on track to deliver over $240 million in annual run rate savings, improving operating leverage and underpinning stronger net margin and earnings growth even amid near term pressure in new equipment sales.
Curious how much earnings growth, margin lift and future P/E the narrative needs to support that higher fair value? The full story connects all three in detail.
Result: Fair Value of $105.18 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this storyline could easily be knocked off course if weakness in China persists or if softer commercial real estate demand keeps new equipment orders under pressure.
Find out about the key risks to this Otis Worldwide narrative.
If you look at the assumptions here and feel differently, or just prefer to test the numbers yourself, you can quickly build a version that reflects your own view with Do it your way.
A great starting point for your Otis Worldwide research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
If Otis has caught your attention, do not stop there. This is your chance to widen your watchlist and spot opportunities you might otherwise miss.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include OTIS.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com