OTIS: The Circle That Could Not Be Squared

研报英文原文证据摘录

OTIS: The Circle That Could Not Be Squared

Electrical Equipment & Multi-Industry

Multi-Industry - Market Weight

OTIS WORLDWIDE CORPORATION (OTIS) July 22, 2026

OTIS: The Circle That Could Not Be Squared Rating:

Peer Perform

The Wolfe Byte Price: $70.41

It was right to spy a conflict between the aggressive Service margin ramp and the Price Target:

mission critical need to improve field quality. Management is still pointing to a NA

(milder) 2H recovery, but investors will clearly need proof points. Stock is likely View OTIS Model

rangebound in the interim. View Comp Table

Company Information

OTIS was a modest underperformer (-2% on the day) following its small 2Q26 52-Week Range $69 - $94

Market Cap. (MM) $27,017

operating miss (vs. our model) and ~20c guide down to the back half outlook. We Enterprise Value (MM) $35,051

had opined that the original plan (post-1Q26) was severely disjointed with the steep Shares Out. (MM) 383.7

ramp in Service margins (~300bps OMX thro' the year) akin to a mountaineering Avg. Value Traded (MM) $446.95 SI% of Float 4.0%

expedition. The revised plan still calls for a ramp in Service profitability (+150bps to

~24.5% during 2H26) which is abnormal (+80bps contribution from incremental price 105

100and +70bps from volume/mix & G&A efficiency). So this is certainly no lay-up, but

we are broadly comfortable with the revised plan: we have lowered our FY26e from 9590

$4.18 to $4.05. Click HERE for our Comments Ahead of the Call and HERE for our 85

Abridged Transcript. 8075

The puzzle was that management's primary objective to improve service quality 7065

and customer retention metrics seemed to conflict with the plan to increase price on Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26