DCF P(above)=0.1%, FV=$44 vs current ~$100+. Dramatically above DCF FV. Otis Worldwide: world's largest elevator company, high-margin service business, China new equipment headwind. Stock price far exceeds DCF fair value. China construction activity declining is a real headwind to new equipment segment. Service backlog is sticky but limited upside from here at current valuation. Concerns outweigh positives at this price.
Fair Value Distribution — percentile bands
0.5% of simulations place fair value above current price
WHAT IS PRICED IN
Revenue-Based Reverse DCF
13.5%/yr
±6.2% · revenue growth to justify current price
FCF-Based Reverse DCF
15.3%/yr
±3.1% · FCF growth to justify current price
THE GAP
Market pricing margin compression or rising capex
KEY VALUE DRIVERS
Spearman correlation — what moves this valuation most
Eagle will generate this view by the next trading session (~6h).
Eagle will generate this view by the next trading session (~6h).
OTIS 2025: Service +5% organic growth offsetting New Equipment collapse (-7%, China >-20%) by leveraging expanding Service margins (25.1% vs 24.6% prior year). Operating margin still expanded to 14.8%...