Morgan Stanley Starts Otis Worldwide Corp (OTIS) at Equalweight

Morgan Stanley analyst Chris Snyder initiates coverage on Otis Worldwide Corp (NYSE: OTIS) with a Equalweight rating and a price target of $97.00.

The analyst comments "The high-quality, durable nature of OTIS has been on display as the service-led business (80% of EBIT) continues to grow EPS through ongoing global construction downturn due a combination of impressive execution, attractive market structure and self-help initiatives. The company’s ability to sustain MSD+ Service growth despite reduced contribution from new construction highlights the durability of OTIS business model and emerging tailwinds from digitized service plus connected units which better positions OTIS to drive Service from the existing installed base. Still, we see NTM risks with OTIS bringing negative mix (OW China & US multi-family, UW Data Center + Manufacturing) which could drive extended declines for the New Equipment business (vs Consensus +LSD in 2025-26) with the softer funnel adding risk to sustained MSD+ Service growth. We value shares at 21.5x blended '25/'26 EPS, a MSD SPX premium which comes in below the high-teens premium that OTIS has garnered since IPO. We think a discount is warranted as cycle declines keep a lid on estimates and if extended pose risk to OTIS ability to sustain MSD+ service growth which is the top driver of company valuation."

For an analyst ratings summary and ratings history on Otis Worldwide Corp click here. For more ratings news on Otis Worldwide Corp click here.

Shares of Otis Worldwide Corp closed at $92.43 yesterday.

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