OTIS changes
Pick any two versions below to diff them.
- Price
- $74.61 → $77.50(+3.9%)
- Discount category
- Deep below intrinsic value → Far below intrinsic value
- Balance sheet
- Cash: $866M Debt: $8.3B Net debt: $7.4B EBITDA, last 12 months: $2.5B Net debt / EBITDA: 3.0× (medium) Interest cover: 8.8× Undrawn credit line: $1.5B, to August 2030 Ratings: Moody's Baa1, S&P BBB Otis has negative equity: a total equity deficit of $5.3 billion at September 30, 2026. It took on debt at its 2020 spin-off from United Technologies and has bought back shares since then, but this is not a sign of distress. Treasury stock was $5.0 billion at September 30, 2026. The Service business maintains about 2.5 million units and gives steady cash flow. Customers also pay in advance, which shows as $3.0 billion of contract liabilities at September 30, 2026. Debt was $8.3 billion at September 30, 2026: $1.2 billion of short-term borrowings and current debt, and $7.1 billion of long-term debt. Almost all debt is unsecured fixed-rate notes at the parent (2025 10-K). EBITDA is operating profit before depreciation and amortization for the 12 months to September 2026. Interest cover is operating profit of $1.73 billion over adjusted net interest expense of $196 million in the first nine months of 2026. In May 2026, Otis issued $700 million of 4.488% notes due 2029, mostly to repay the €600 million of euro notes due December 15, 2026. The term sheet of these notes gives the ratings: Baa1 from Moody's and BBB from S&P. Adjusted free cash flow was $834 million in the first nine months of 2026, and Otis expects about $1.5 billion for the full year (October 28, 2026). Otis bought back $807 million of shares in the first half of 2026 and none in Q3 2026. It paid $498 million of dividends in the first nine months of 2026. added: On November 5, 2026, Otis issued $500 million of 5.825% notes due 2036 to repay its $500 million of 2.293% notes due April 5, 2027. The debt leaves less room if Service margins fall again. As of Sep 30, 2026.
- Recent events
- added: Nov 2, 2026: Otis sold $500 million of 5.825% notes due 2036. The sale closed on November 5, 2026. Otis plans to use the money, with cash on hand, to repay its $500 million of 2.293% notes when they become due on April 5, 2027. Oct 28, 2026: Otis reported Q3 2026 results. Net sales grew 6% to $3.91 billion, 6% organic. Service sales grew 7% organic, with modernization up 20% and maintenance and repair up 4%. New Equipment sales grew 3% organic, but sales in China fell more than 20%. The Service segment margin was 24.2%, 100 basis points higher than in Q2 2026 but 130 basis points lower than a year earlier. Adjusted EPS was $1.05, flat. Otis kept its 2026 guidance of net sales of $15.1 to $15.3 billion and adjusted EPS of $4.01 to $4.05. It set its adjusted free cash flow guidance at about $1.5 billion, from $1.50 to $1.55 billion. Oct 7, 2026: Otis said it will report Q3 2026 results and discuss its 2026 outlook on a conference call on October 28, 2026, at 8:30 a.m. ET. Sep 15, 2026: Otis announced that CEO, Chair, and President Judy Marks will retire when her successor starts, expected in the first half of 2027, or on July 31, 2027 at the latest. If the successor starts earlier, she stays as an unpaid senior advisor until July 31, 2027. The board is running a search with Spencer Stuart and considers internal and external candidates. Reuters reported that the stock fell 1.4% in early trading. Aug 17, 2026: Otis won an order for more than 250 elevators and escalators at Tianjin 117 Tower in China, a new supertall building. The order includes new equipment and modernization. Otis did not give the value of the order. Jul 22, 2026: Otis reported Q2 2026 results. Net sales grew 7% to $3.86 billion, 6% organic. Service sales grew 9% organic, led by 24% modernization growth, while New Equipment sales fell 1% organic. Adjusted EPS was $1.01, down 4%, as adjusted operating margin fell 180 basis points to 15.2%. The Service segment margin fell 170 basis points to 23.2%. MarketBeat reported that the stock fell more than 2% on the day. Jul 22, 2026: Management cut full-year 2026 adjusted EPS guidance to $4.01-$4.05, from $4.20-$4.24 in April, and adjusted free cash flow guidance to $1.50-$1.55 billion. It was the second cut in a row. On the earnings call, management named about $50 million of additional productivity and cost headwinds from labor costs, materials, and the longer time it takes to onboard newly hired mechanics. Management expects the Service margin to grow by about 150 basis points in the second half of 2026. Apr 22, 2026: Otis reported Q1 2026 results. Net sales grew 6% to $3.57 billion, 1% organic. Service sales grew 5% organic, while New Equipment sales fell 5% organic. New Equipment orders grew more than 20% in the Americas but fell in the low teens in China. Management slightly raised full-year 2026 net sales guidance to $15.1-$15.3 billion. It also lowered its profit guidance: adjusted EPS to $4.20-$4.24, from growth in the mid to high single digits in January. Apr 21, 2026: The board raised the quarterly dividend 5% to $0.44 per share, payable June 12, 2026. Management said the dividend has grown about 120% since the 2020 spin-off from United Technologies. Apr 13, 2026: Otis completed its acquisition of a majority stake in WeMaintain, a Paris-based, 350-person elevator service technology company that uses IoT and AI tools for maintenance. The press release gave no price, but the Q2 2026 10-Q shows that Otis paid $170 million in April 2026 for a majority stake in a French elevator service company. WeMaintain continues to run as an independent company.