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    Otis Worldwide (OTIS): Assessing Valuation After Recent Share Price Softness Despite Growing Earnings

    Simply Wall St·12/05/2025 22:18:41
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    Otis Worldwide (OTIS) has drifted lower over the past month, even though its elevator and escalator business continues to grow revenue and earnings. That disconnect is where today’s valuation story starts.

    See our latest analysis for Otis Worldwide.

    At around $86.91, Otis’s recent share price softness, including a negative year to date share price return, looks more like sentiment cooling than a shift in fundamentals, especially given its positive multi year total shareholder returns.

    If Otis’s mix of infrastructure exposure and steady cash flows appeals to you, this could be a good moment to explore aerospace and defense stocks as another pocket of durable, industrial themed opportunities.

    With shares lagging despite solid revenue and earnings growth, a double digit discount to analyst targets, and still respectable multi year returns, is Otis now a mispriced cash generator, or is the market already discounting its future growth?

    Most Popular Narrative: 15.8% Undervalued

    With Otis Worldwide last closing at $86.91 versus a narrative fair value near $103, the current gap sets up a potentially meaningful upside story.

    The accelerating momentum in modernization orders (up 22% in the quarter and supported by a record-high backlog) positions Otis to benefit from the global trend of aging building infrastructure, which is expected to drive a multi-year growth cycle for modernization and associated high-margin service revenue, positively impacting both revenue and earnings.

    Read the complete narrative.

    Curious how modest revenue growth, rising margins and a richer future earnings multiple can still point to upside from here? The full narrative reveals the math behind that conviction, including how long term earnings power and a higher future valuation multiple are stitched together to reach that fair value.

    Result: Fair Value of $103.25 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, persistent weakness in China and softer commercial real estate demand could weigh on new equipment orders, installation pipelines and, ultimately, Otis’s long term growth trajectory.

    Find out about the key risks to this Otis Worldwide narrative.

    Build Your Own Otis Worldwide Narrative

    If you see Otis differently or want to stress test the assumptions with your own inputs, build a personalized narrative in minutes, Do it your way.

    A great starting point for your Otis Worldwide research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.