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Otis Worldwide Corp Ordinary Shares OTIS Stock Quote

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Morningstar‘s Stock Analysis OTIS

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Is it the right time to buy or sell?

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Economic Moat

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Capital Allocation

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Increasing Otis Fair Value Estimate to $73

Business Strategy and Outlook

| Denise Molina, CFA |

Otis is the largest elevator original equipment manufacturer (OEM) by revenue globally and also boasts the highest operating profit margins of the three publicly listed elevator OEMs, including Kone and Schindler. It has longer-term opportunities to grow its lucrative service business. However, along with its peers, it faces a near-term slowdown in the Chinese new equipment market, which we estimate contributes just over 10% of the company's operating profits. China's property developer sector, which carries high levels of debt, will likely go through a multi-month restructuring process before normal development activity resumes. A proportionately larger revenue share from service (maintenance and spare sparts) relative to competitors underpins the company's superior profitability. Close to 60% of the company's profits come from service, which delivers profit margins as much as 3 times that of new equipment and replacement ("modernization") unit EBIT margins.

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Key Statistics OTIS

Company Profile OTIS

Business Description

Otis is the largest global elevator and escalator supplier by revenue with around one quarter of share excluding Japan. In 1854 Otis’ founder and namesake, Elisha Graves Otis, invented a safety mechanism that prevented elevators from falling if the hoisting cable failed.The company's product and service lifecycle begins with installations of elevator units in new buildings, later selling maintenance services on the units, and eventually replacement of the units after the average 15-20 year useful life of an elevator. As the largest global OEM, over decades Otis has built a base of 2 million elevators under service. Its business model is much the same as that of its competitors Kone, Schindler, and Thyssenkrupp.

Contact
One Carrier Place
Farmington, CT, 06032
T +1 860 674-3000
Industry Specialty Industrial Machinery
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Employees 70,000