Barclays has revised its price target for Otis Worldwide (OTIS, Financial), bringing it down to $90 from the previous $92. Despite this adjustment, Barclays maintains an Underweight rating on the company's shares.
The investment firm cites ongoing challenges within the non-residential sector as a primary factor influencing its decision. Barclays has expressed reservations about this market, identifying it as one of its less favored areas. Additionally, the firm's review of earnings across the sector has yielded mostly disappointing insights, further shaping its cautious stance on Otis Worldwide.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Otis Worldwide Corp (OTIS, Financial) is $98.05 with a high estimate of $109.00 and a low estimate of $90.00. The average target implies an upside of 5.73% from the current price of $92.74. More detailed estimate data can be found on the Otis Worldwide Corp (OTIS) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Otis Worldwide Corp's (OTIS, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Otis Worldwide Corp (OTIS, Financial) in one year is $95.52, suggesting a upside of 3% from the current price of $92.74. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Otis Worldwide Corp (OTIS) Summary page.
OTIS Key Business Developments
Release Date: April 23, 2025
- Net Sales: $3.3 billion, with organic sales flat year-over-year.
- Adjusted Operating Profit: Increased 3%, with a 40 basis points expansion in margin to 16.7%.
- Adjusted EPS: Grew 5% in the quarter.
- Adjusted Free Cash Flow: $186 million generated.
- Share Repurchases: Approximately $250 million completed.
- Dividend Increase: Announced an 8% increase, cumulative increase since spin approximately 110%.
- Service Organic Sales Growth: 4%, with growth across all business lines.
- Modernization Orders: Increased 12%, with backlog up 14% at constant currency.
- New Equipment Orders: Declined 1% overall, with regional variations.
- New Equipment Operating Profit Margin: Increased 20 basis points to 5.7%.
- 2025 Financial Outlook: Net sales expected between $14.6 billion and $14.8 billion.
- Adjusted Free Cash Flow Outlook: Approximately $1.6 billion for 2025.
- Share Repurchase Target for 2025: $800 million.
- Adjusted EPS Outlook for 2025: $4 to $4.10 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Otis Worldwide Corp (OTIS, Financial) reported a 5% growth in adjusted EPS for the first quarter, driven by solid growth in service and margin expansion.
- The company announced an 8% increase in its dividend, marking a cumulative dividend increase of approximately 110% since its spin-off.
- Modernization orders increased by 12%, with a backlog up 14% at constant currency, indicating strong future growth potential.
- The service segment showed resilience with a 4% organic sales growth, supported by a 40 basis points expansion in adjusted operating margin.
- Otis Worldwide Corp (OTIS) was recognized by Fortune as one of the world's most admired companies and named to Wall Street Journal's Best Managed Companies list, reflecting strong corporate reputation and management.
Negative Points
- New equipment organic sales declined by 7% in the quarter, with significant declines in China and the Americas.
- The company faces a potential $45 million to $75 million negative impact on operating profit in 2025 due to tariffs on Chinese imports.
- Despite strong performance in other regions, new equipment orders in China declined by more than 20%, aligning with expectations of market stabilization later in the year.
- The repair growth was muted in the first quarter, up only low single digits, due to timing of backlog execution.
- Otis Worldwide Corp (OTIS) anticipates a mid-single-digit decline in global new equipment units for the year, with particular weakness expected in the Asia region.
