| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 10.60 | -85 |
Otis Worldwide Corp (4PG.DE) is a global leader in the manufacture, installation, and servicing of elevators and escalators. Founded in 1853 by Elisha Graves Otis, the company operates through two key segments: New Equipment and Service. The New Equipment segment focuses on designing, manufacturing, and installing passenger and freight elevators, while the Service segment provides maintenance, repair, and modernization services to enhance elevator and escalator performance. Headquartered in Farmington, CT, Otis serves a diverse clientele across residential, commercial, and industrial sectors. As part of the Construction Materials industry within the Basic Materials sector, Otis benefits from urbanization trends and infrastructure development worldwide. The company's strong brand recognition, technological innovation, and extensive service network position it as a key player in the vertical transportation market. With a market capitalization of approximately €38.5 billion, Otis continues to leverage its legacy and operational expertise to drive growth in both developed and emerging markets.
Otis Worldwide Corp presents a compelling investment opportunity due to its strong market position, recurring revenue from service contracts, and global footprint. The company reported €13.7 billion in revenue and €1.25 billion in net income for FY 2022, with a diluted EPS of €2.96. Its operating cash flow of €1.56 billion and solid cash reserves of €1.19 billion provide financial stability. However, investors should consider the high total debt of €7.08 billion and the cyclical nature of the construction industry, which may impact new equipment sales. The dividend yield, with a payout of €0.92 per share, adds appeal for income-focused investors. Otis's beta of 0.872 suggests lower volatility compared to the broader market, making it a relatively stable pick in the Basic Materials sector.
Otis Worldwide Corp holds a competitive advantage through its long-standing brand reputation, extensive service network, and technological leadership in elevator and escalator solutions. The company's dual revenue streams—new equipment sales and high-margin service contracts—provide stability and growth potential. Otis's global presence allows it to capitalize on urbanization trends in emerging markets while maintaining strong positions in mature markets. Its focus on digitalization, including IoT-enabled elevators, enhances operational efficiency and customer value. However, competition remains intense, with rivals offering similar products and services. Otis differentiates itself through superior after-sales service and modernization capabilities, which drive customer retention. The company's ability to innovate and adapt to regulatory changes, such as energy efficiency standards, further strengthens its market position. Despite these strengths, Otis faces challenges from local competitors in price-sensitive markets and potential supply chain disruptions affecting new equipment deliveries.