Is Now An Opportune Moment To Examine 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$101 at one point, and dropping to the lows of US$91.20. 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$97.73 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.

See our latest analysis for Otis Worldwide

What Is Otis Worldwide Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.9% 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 $101.69, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Otis Worldwide’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Otis Worldwide generate?

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 over the next few years are expected to increase by 29%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in OTIS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on OTIS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you want to dive deeper into Otis Worldwide, you'd also look into what risks it is currently facing. To help with this, we've discovered 4 warning signs (1 is a bit unpleasant!) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com