Is It Too Late To Consider Buying Otis Worldwide Corporation (NYSE:OTIS)?

Today we're going to take a look at the well-established Otis Worldwide Corporation (NYSE:OTIS). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$106 at one point, and dropping to the lows of US$91.43. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Otis Worldwide's current trading price of US$99.95 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Otis Worldwide’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Otis Worldwide

What's The Opportunity In Otis Worldwide?

According to our valuation model, Otis Worldwide seems to be fairly priced at around 17% below our intrinsic value, which means if you buy Otis Worldwide today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $119.84, then there’s not much of an upside to gain from mispricing. What's more, Otis Worldwide’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Otis Worldwide?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Otis Worldwide's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? OTIS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on OTIS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Otis Worldwide at this point in time. To help with this, we've discovered 3 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in Otis Worldwide.

If you are no longer interested in Otis Worldwide, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.