Oct. 8 at 5:23 PM
Wolfe Research upgraded Otis Worldwide to “Outperform” from “Peer Perform,” citing improving new equipment orders and sales momentum that could drive a rebound in cash flow as 2025 comes to a close.
The firm acknowledged lingering risks for Q4 forecasts and possible small cuts to 2026 consensus estimates but said these concerns are already priced into the stock. Wolfe sees room for sentiment to turn more positive as China’s market stabilizes and order momentum builds.
Otis’s new equipment segment, pressured by weak construction in China and Europe, appears close to bottoming, while its service business remains steady. Wolfe believes stronger order and sales growth could restore mid-single-digit organic revenue gains and boost free cash flow conversion.
The stock trades around 21 times forward earnings, below peers at 26–29 times, and Wolfe expects that valuation gap to narrow as growth improves.
$OTIS