Otis Worldwide Corp.’s share price has been on a slow decline for much of the year, but signs are emerging that the worst may be over.
While the stock has slipped more than 3% year to date, it gained over 2% in the past week, supported by improved analyst sentiment and expectations of stronger demand ahead.
The elevators and escalators manufacturer, spun off from United Technologies in 2020 alongside Carrier Global, is poised to benefit from a global building boom.
Growth is particularly strong in China, South Korea, and India, and Otis’ services business—maintaining and modernising aging elevators in high-rise buildings—remains a steady revenue generator.
“Elevators are getting older everywhere. They need tech and aesthetic refreshes. It’s all about rise and speed,” Judy Marks, chair, CEO and president of Otis, told Barron’s.
Services business provides steady cushion
Analysts say the company’s higher-margin services segment will be key to near-term performance.
Argus Research analyst Kristina Ruggeri, who maintains a Buy rating, pointed out that aftermarket services are exempt from tariffs and could accelerate growth in China, where older equipment is creating strong demand.
Otis has also attracted upgrades from JP Morgan and Wolfe Research, both raising their ratings from Sell to Hold.
While not an outright bullish call, the moves signal reduced downside risk.
The shares, which are down about 5% year to date through Tuesday, now trade at roughly 19.7 times estimated 2026 earnings—below the S&P 500’s 21.4 times multiple and Otis’ historical 22 times average.
US construction activity picking up
Marks remains confident in continued order growth in North America, citing a rising Dodge Momentum Index—a key indicator of US construction activity—and strong demand in markets such as Nashville, Houston, and Dallas.
The company has recorded four consecutive quarters of low-to-mid-teen percentage new-order growth in the US and Canada.
She also suggested that a widely expected Federal Reserve interest rate cut in September could release pent-up demand from customers who have delayed elevator purchases.
“There is pent-up demand for when we get the next rate cut,” Marks said.
Valuation appeal and competitive edge
Otis trades at 22 times this year’s earnings estimates, below its five-year average of 25, which analysts view as reasonable given consensus forecasts for annual earnings growth of more than 10% in the coming years.
Wall Street’s median price target is close to $100 a share—around 12% above its current $89 level.
RBC Capital Markets analyst Nick Housden, who rates the stock Outperform, said Otis is undervalued compared to European peers Kone and Schindler Holding, despite having the highest profit exposure to maintenance and being the “highest-quality company” in the sector.
Mixed technical signals call for patience
Market sentiment remains divided.
Data from AInvest shows the market is “volatile but directionally unclear,” with long and short signals largely balanced.
While the fund-flow score is positive, inflow ratios are low, and technical indicators remain neutral.
“Aggressive entries may be premature,” AInvest said.
“Consider holding off on aggressive entries until a clearer trend emerges, or look for a pullback on oversold indicators with a stop-loss in place,” AInvest said.
The company’s ability to convert anticipated demand into sustainable earnings growth could determine whether the current optimism translates into a sustained rally.
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