Otis Worldwide: Good Growth Prospects At Reasonable Valuation

GS Analytics
3.23K Followers

Summary

  • A high backlog level and pricing in FY2023 should drive the topline growth in the New Equipment segment.
  • The accelerated maintenance portfolio growth, pricing increases, and a high backlog for modernization business should increase the revenue in the Service segment.
  • Margins should also improve thanks to volume leverage, pricing, and productivity improvements.
  • Valuation is at a discount to its historical levels.

Otis headquarters in Silicon Valley

Sundry Photography

Investment Thesis

Otis Worldwide Corporation's (NYSE:OTIS) New Equipment sales are expected to increase in the coming years, driven by China reopening, a high backlog level, and pricing increases. Additionally, in the Service segment, accelerated maintenance portfolio growth, pricing, and a high backlog in the modernization

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article is written by Harshit K.

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