Wells Fargo analyst Joe O’Dea has maintained their neutral stance on OTIS stock, giving a Hold rating on February 13.
Geoff Meacham has given his Hold rating due to a combination of factors that suggest a stable but not aggressively positive outlook for Otis Worldwide. The company’s service growth and margin opportunities appear to be better than previously appreciated, with a medium-term expectation that leans towards a positive trajectory. The service segment is anticipated to be the main growth driver, with both modernization and repair adding durable growth tailwinds to an aging installed elevator base. Service margin expansion is also expected to contribute to a steady increase in operating profit.
The report highlights a compelling service algorithm that balances cancellations with new unit conversions and recaptured field units, leading to a portfolio growth that has recently accelerated. Furthermore, enthusiasm is noted for the modernization segment due to the aging global installed base, with Otis having revamped its approach to address such demands. While new equipment markets are forecasted to remain relatively flat, the repair segment is expected to continue contributing to service growth. Overall, these factors culminate in a prediction of a 10%+ EPS compound annual growth rate through 2028, supported by consistent operational margin expansions, favorable tax paths, and solid free cash flow conversions. This paints a picture of steady performance for Otis Worldwide, supporting the Hold rating as the company seems well-positioned but not without potential headwinds or limitations to growth.
In another report released on February 13, J.P. Morgan also maintained a Hold rating on the stock with a $104.00 price target.
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Otis Worldwide (OTIS) Company Description:
Otis Worldwide Corporation engages in designing, manufacturing, selling and installations of passenger and freight elevators, escalators and moving walkways for infrastructure projects, and residential and commercial buildings. It also provides maintenance and repair services, as well as modernization services for elevators and escalators.
Read More on OTIS:
- Otis Worldwide price target raised to $104 from $95 at JPMorgan
- Otis Declares Quarterly Dividend of $0.34 per Share
- Otis Worldwide price target lowered to $95 from $97 at Wells Fargo
- Otis Worldwide price target raised to $85 from $80 at Barclays
- Otis Worldwide sees FY24 adjusted EPS $3.80-$3.90, consensus $3.85
