Is Otis Worldwide Stock Underperforming the S&P 500?

Farmington, Connecticut-based Otis Worldwide Corporation (OTIS) manufactures, installations, and services elevators and escalators in the US, China, and internationally. With a market cap of $40.1 billion, Otis Worldwide operates through New Equipment and Service segments.

Companies worth $10 billion or more are generally described as “large-cap stocks,” Otis fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the elevators and escalators space.

Otis touched its all-time high of $106.83 on Mar. 10 and is currently trading 6.5% below that peak. Meanwhile, Otis gained 1.7% over the past three months, notably outperforming the S&P 500 Index’s ($SPX) 7.5% decline during the same time frame.

Otis gained 7.8% over the past six months significantly outperforming SPX’s marginal 6 basis point uptick during the same time frame. However, Otis generated a modest 2.5% return over the past 52 weeks, lagging behind the SPX’s 8.2% gains over the past year.

To confirm the recent upturn, Otis has traded consistently above its 200-day moving average since mid-February and mostly above its 20-day moving average since mid-January with some fluctuations.

Otis Worldwide’s stock prices dipped 1.3% after the release of its mixed Q4 results on Jan. 29. Driven by the notable surge in organic service revenues, the company’s overall net sales for the quarter increased 1.5% year-over-year to $3.7 billion, exceeding the Street’s expectations by 72 basis points. Although the company experienced a slight improvement in profit margins and its adjusted net income to shareholders increased 5.1% year-over-year to $374 million, its adjusted EPS of $0.93, missed the consensus estimates by 2.1% which wasn’t taken positively by the market.

While Otis Worldwide has outpaced its peer KONE Oyj’s (KNYJY) 6.3% gains over the past six months, it has notably underperformed KONE’s 23.1% surge over the past 52 weeks.

Among the 10 analysts covering the OTIS stock, the consensus rating is a “Hold.” Its mean price target of $101.40 represents a modest 1.5% premium to current price levels.