OTIS: 2Q26 Comments Ahead of the Call

研报英文原文证据摘录

OTIS: 2Q26 Comments Ahead of the Call

Electrical Equipment & Multi-Industry

FLASH

FLASH: OTIS WORLDWIDE CORPORATION (OTIS) July 22, 2026

OTIS: 2Q26 Comments Ahead of the Call Rating:

Peer PerformThis is a slight quarterly miss of roughly 1c, with FY26 EPS guidance lowered by Price:

4-5% at the midpoint as management seems to have dialed back micro-pricing and $71.95

cost reduction/productivity expectations in efforts to improve service metrics. A cut Price Target:

NAwas expected but the resultant range of $4.01-4.05 is probably closer to the bearish

end of the spectrum. Moreover, Service margins remain anchored to ~23% zone and Source: FactSet, Wolfe Research

it does not appear that there is much improvement dialed in through the back half Priced as of 07/21/26

of the year. We would expect the stock to lag, but find valuation support at these

depressed levels.

Headline EPS of $1.01 is relatively in line with WRe/Street $1.02/1.01 with

slightly weaker New Equipment and heavier Corporate drivers. Sales (+6% core

vs. ~3% consensus) was actually much stronger, largely on account of a big flush Nigel Coe, CPA; CFA

of MOD backlog (+24%) but we also saw acceleration in M&R to +6% (vs. +4% ncoe@wolferesearch.com (646) 582-9259

prior). However, operating margin contraction more than offset: 15.2%, -180bps Y/Y, View Nigel’s Research

compared to 15.8% WRe with Service margin of 23.2% falling short of ~24% bogey View OTIS Model

(and flat with prior quarter). View Comp Table

Service margin dynamics will dominate the discussion. Recall management had Bradbhewitt@wolferesearch.comHewitt

called for sequential improvement from 23% in 1Q26, towards >25% during 2H26, (646) 582-9256

on a variety of measures including repair micro-price increases and cost reduction. Aidan Harmon