Farmington, Connecticut-based Otis Worldwide Corporation (OTIS) manufactures, installs, and services building systems. Valued at $26.4 billion by market cap, the company offers elevators, escalators, and other moving products.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and OTIS perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty industrial machinery industry. OTIS is the largest global elevator and escalator supplier, known for its innovative safety features dating back to 1854. The company boasts a loyal customer base and competitive edge, with its success lying in commanding premium pricing, securing long-term service contracts, and leveraging its installed base for consistent revenue.
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Despite its notable strength, OTIS slipped 26.7% from its 52-week high of $94.57, achieved on Feb. 20. Over the past three months, OTIS stock declined 2.8%, underperforming the Nasdaq Composite’s ($NASX) 2.2% gains during the same time frame.
www.barchart.comShares of OTIS fell 20.7% on a YTD basis and dipped 21.3% over the past 52 weeks, notably underperforming NASX’s YTD gains of 13% and 20% returns over the last year.
To confirm the bearish trend, OTIS has been trading below its 50-day moving average since early March, with some fluctuations. The stock has been trading below its 200-day moving average over the past year, experiencing slight fluctuations.
www.barchart.comOTIS underperformed as new-equipment demand weakened, particularly in China where sales fell in the high teens, with management now expecting organic new-equipment sales to be flat to down low-single digits.
On Jul. 22, OTIS shares closed down more than 2% after reporting its Q2 results. Its adjusted EPS of $1.01 exceeded Wall Street expectations of $1. The company’s revenue was $3.9 billion, topping Wall Street forecasts of $3.7 billion. OTIS expects full-year adjusted EPS in the range of $4.01 to $4.05, and revenue in the range of $15.1 billion to $15.3 billion.
In the competitive arena of specialty industrial machinery, Schindler Holding AG (SHLRF) has taken the lead over OTIS, with a 12.2% downtick on a YTD basis and 13.3% losses over the past 52 weeks.
Wall Street analysts are reasonably bullish on OTIS’ prospects. The stock has a consensus “Moderate Buy” rating from the 13 analysts covering it, and the mean price target of $86.67 suggests a potential upside of 25.1% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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