Otis Worldwide Corporation OTIS
Otis remains a hold as FY2025 results show a company caught between a resilient, high-quality service franchise and deteriorating earnings power. Revenue grew just 1.2% to $14.43B while EPS fell 14% to $3.50 and net income declined 15.9%, driven by China new-equipment weakness and cost pressure — and management cut full-year 2026 guidance per recent Q2 reporting.
The valuation is undeniably cheap at 18.3x P/E, a 37% discount to the peer median of 29.3x, with stable FCF of $1.44B and modernization up 24%, but $8.75B of debt against negative book equity of -$5.39B, net insider selling of $36M over 24 months, and a stock trading below both its 50-day and 200-day moving averages argue against adding until earnings stabilize.
What could go wrong
- China new-equipment deterioration. Persistent weakness in China construction continues to weigh on the New Equipment segment; management already cut full-year 2026 guidance citing this headwind.
- Leverage on negative equity. Total debt of $8.75B against negative stockholders' equity of -$5.39B as of FY2025 limits financial flexibility and amplifies earnings volatility.
- Margin compression in net income. Net margin fell to 9.6% in 2025 from 11.5% in 2024 despite gross margin improving to 30.3%, indicating cost pressure below the gross-profit line.
- Insider net selling. Over the trailing 24 months, insiders net sold approximately $36M in shares across 202 transactions, with no cluster-buy signal.
What would change my mind
Where this comes from: FMP annual fundamentals FY2025 · derived_metrics FY2025 · peer_relative composite · FMP annual fundamentals FY2025. Orin's read on OTIS; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All OTIS filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $1.8B | 0.0% of fund |
| Vanguard Portfolio Management | $1.4B | 0.1% of fund |
| State Street | $1.2B | 0.0% of fund |
| Geode Capital Management | $906.4M | 0.0% of fund |
| Franklin Resources | $843.7M | 0.2% of fund |
| Morgan Stanley | $785.1M | 0.0% of fund |
96 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 205 Form 4 filings, net −$36.3M. Of the 50 on hand, 0 were open-market purchases and 5 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about OTIS
Orin answers questions about OTIS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 17.5× | 26.2× | 44.5× |
| EV/EBITDA | 14.1× | 18.2× | — |
| P/S | 1.74× | 2.59× | — |
Its P/E sits below all 5 of the last 5 years (−3.59σ from its own mean).
6.3%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $1.4B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$89
$75 – $105 · +30% against today's price
- 7 buy or overweight
- 7 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| OTISOtis Worldwide Corporation | $26B | 17.5× | 14.1× | 30.2% | 10.2% | -27% |
| AMEAMETEK, Inc. | $56B | 35.9× | 24.1× | 36.6% | 20.0% | 15% |
| DALDelta Air Lines, Inc. | $54B | 13.4× | 8.2× | 27.3% | 5.8% | 19% |
| DOVDover Corporation | $25B | 22.6× | 15.0× | 39.6% | 13.5% | 15% |
| EMEEMCOR Group, Inc. | $33B | 23.5× | 14.7× | 19.7% | 7.7% | 38% |
| FIXComfort Systems USA, Inc. | $57B | 39.9× | 28.4× | 25.7% | 12.8% | 54% |
| IRIngersoll Rand Inc. | $30B | 31.1× | 17.0× | 37.9% | 12.1% | 9% |
| ROKRockwell Automation, Inc. | $48B | 40.5× | 28.9× | 54.5% | 13.4% | 33% |
| ROPRoper Technologies, Inc. | $37B | 15.2× | 10.7× | 69.5% | 30.2% | 13% |
| WABWestinghouse Air Brake Technologies Corporation | $49B | 39.2× | 22.7× | 34.3% | 10.6% | 11% |
| XYLXylem Inc. | $25B | 25.9× | 14.6× | 39.2% | 11.1% | 9% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 38.7% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $92 | $70.39 · +30% | 2026-06-10 |
| Levered DCF | $86 | $70.39 · +23% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.