OTIS
📉 Otis reported negative quarterly results, contributing to recent share price stagnation despite its historical premium valuation.
⚙️ The company’s strength lies in its high-margin maintenance business, providing consistent and predictable cash flow, unlike the more volatile installation segment.
💰 Currently trading around a 22x multiple, below its typical 24-25x range, combined with steady share buybacks (10% reduction since 2021), suggesting potential value.
@bernardodegarcia:
“Otis was reporting today, and results were negative. I haven’t had time to look closely, but this is usually a company that rarely trades cheap. We’re seeing that over the last year or so, it hasn’t gone anywhere. Looking quickly, it’s unusual for us, but let’s check. It’s not a company we usually see trading at a multiple of 22.7 times. Rarely, maybe in the 2022 crisis post-COVID, but generally, it moves quite cheerfully between 24 or 25 times, and there it is at 22 right now. One of the things I like most about Otis isn’t elevator installation, but maintenance. This is obviously where it has better margins and that constant growth. Look at its cash flow; it’s practically like clockwork, with some volatility, but it rarely drops below $1 billion or surges extremely above $1.7-1.8 billion. It practically moves between $1.3-1.5 billion every 12 months. Tick tock, tick tock. Fantastic, really. And the number of shares is also fantastic, down about 10% from 434 million in 2021. It’s not fantastic speed, but long-term, it will obviously be noticeable… I wouldn’t worry much about Otis. I have no doubt we will return to the February highs and break them. I don’t know when.”
Watch the exact part of the video where @bernardodegarcia talks about Otis Worldwide Corporation here:
Watch the video on YouTube
Read more articles analyzing Otis Worldwide Corporation (OTIS) at the following link. OTIS stock.
