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Farmington, Connecticut-based Otis Worldwide Corporation (OTIS) manufactures, installs, and services building systems. Valued at $34.5 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 a competitive edge, with its success rooted in commanding premium pricing, securing long-term service contracts, and leveraging its installed base for consistent revenue growth.
Despite its notable strength, OTIS slipped 18% from its 52-week high of $106.83, achieved on Mar. 10. Over the past three months, OTIS stock declined 8.1%, underperforming the Dow Jones Industrials Average’s ($DOWI) 6.1% gains during the same time frame.
In the longer term, shares of OTIS dipped 5.4% on a YTD basis and fell 4.9% over the past 52 weeks, underperforming DOWI’s YTD gains of 6.9% and 11.7% returns over the last year.
To confirm the bearish trend, OTIS has been trading below its 50-day and 200-day moving averages since late July.
On Jul. 23, OTIS shares closed down by 12.4% after reporting its Q2 results. Its adjusted EPS of $1.05 surpassed Wall Street expectations of $1.02. The company’s revenue was $3.6 billion, falling short of Wall Street forecasts of $3.7 billion. OTIS expects full-year adjusted EPS in the range of $4 to $4.10, and expects revenue in the range of $14.5 billion to $14.6 billion.
In the competitive arena of specialty industrial machinery, Schindler Holding AG (SHLRF) has taken the lead over OTIS, showing resilience with a 33.1% uptick on a YTD basis and 30.7% gains over the past 52 weeks.
Wall Street analysts are cautious on OTIS’ prospects. The stock has a consensus “Hold” rating from the 13 analysts covering it, and the mean price target of $99 suggests a potential upside of 13% 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.
