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Farmington, Connecticut-based Otis Worldwide Corporation (OTIS) manufactures, installs, and services building systems. Valued at $39.1 billion by market cap, the company offers elevators, escalators, and other moving products.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and OTIS perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty industrial machinery industry. OTIS is the largest global elevator and escalator supplier, known for its innovative safety features dating back to 1854. The company boasts a loyal customer base and competitive edge, with its success lying in commanding premium pricing, securing long-term service contracts, and leveraging its installed base for consistent revenue.
Despite its notable strength, OTIS slipped 9.5% from its 52-week high of $106.33, achieved on Oct. 17. Over the past three months, OTIS stock gained 1.5%, underperforming the Industrial Select Sector SPDR Fund’s (XLI) 4.8% gains during the same time frame.
In the longer term, shares of OTIS rose 7.5% on a YTD basis and climbed 6.7% over the past 52 weeks, underperforming XLI’s YTD gains of 20.7% and 21.7% returns over the last year.
To confirm the bearish trend, OTIS has been trading below its 50-day moving average since early December. The stock is trading below its 200-day moving average recently.
On Oct. 30, OTIS shares closed down more than 3% after reporting its Q3 results. Its adjusted EPS of $0.96 missed Wall Street expectations of $0.97. The company’s revenue was $3.55 billion, failing to meet Wall Street forecasts of $3.59 billion.
In the competitive arena of specialty industrial machinery, Schindler Holding AG (SHLRF) has taken the lead over OTIS, showing resilience with a 21.6% uptick on a YTD basis and 28.2% gains over the past 52 weeks.
Wall Street analysts are cautious on OTIS’ prospects. The stock has a consensus “Hold” rating from the 11 analysts covering it, and the men price target of $103.18 suggests a potential upside of 7.3% from current price levels.
