Otis Worldwide (OTIS): Assessing Valuation After Major Elevator Contract Win in India’s Luxury Housing Market

Otis Worldwide (NYSE:OTIS) is in focus after its Indian subsidiary signed a major deal to deliver 169 next-generation elevator systems for three luxury residential projects in Hyderabad, further expanding its presence in India’s premium housing sector.

See our latest analysis for Otis Worldwide.

Despite Otis Worldwide’s impressive contract wins and growing global footprint, investors have seen the company’s momentum fade this year. The share price closed at $91.29 and delivered a 12.4% drop in total shareholder return over the last 12 months. However, the longer-term story remains positive. The three-year total return is 43.4%, showing that patient shareholders have still been rewarded for sticking with it.

If curiosity about how other companies are performing has you thinking beyond elevators, it might be a great opportunity to discover fast growing stocks with high insider ownership.

So with shares languishing after a year of underperformance and analysts still projecting double-digit upside, is there real value hiding in Otis Worldwide at today’s price, or has the market already factored in the company’s future growth?

Most Popular Narrative: 8.9% Undervalued

The most widely followed narrative suggests Otis Worldwide’s shares are trading below its fair value, with the model’s fair value estimate set at $100.23 compared to the recent close of $91.29. This valuation reflects optimism around sustainable growth drivers and improved margin expectations that surpass peers’ averages.

The accelerating momentum in modernization orders, up 22% in the quarter and supported by a record-high backlog, positions Otis to benefit from the global trend of aging building infrastructure. This trend is expected to drive a multi-year growth cycle for modernization and associated high-margin service revenue, positively impacting both revenue and earnings.

Read the complete narrative.

Want to know what’s fueling this premium price tag? The key factor is a combination of long-term growth projections and a profit margin increase that signals greater earnings potential. Find out which specific forecasts set this narrative apart and what future financial milestones could justify the market’s optimistic stance.

Result: Fair Value of $100.23 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weakness in China or a more pronounced slowdown in commercial real estate demand could quickly erode the case for undervaluation.

Find out about the key risks to this Otis Worldwide narrative.

Build Your Own Otis Worldwide Narrative

If you think there’s more to the story or want to test your own thesis, you can quickly build your own Otis Worldwide view in minutes. Do it your way.

A great starting point for your Otis Worldwide research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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