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On Monday, RBC Capital Markets adjusted its price target for Otis Worldwide Corp (NYSE:OTIS), reducing it from $109.00 to $105.00, while continuing to recommend the stock as Outperform. The revision followed a day when Otis shares lagged due to a combination of lowered profit forecasts and slower growth in its Maintenance & Repair (M&R) segment, which resulted in the stock underperforming by 8 percentage points.
The firm acknowledged the reduction in profit guidance as a slight negative but considered it to be minor. Analysts at RBC Capital expressed confidence in the company’s management, noting that they had adequately addressed concerns regarding the growth of the M&R segment. Despite a projection of modest earnings growth in the second quarter, the analysts anticipate stronger performance in the second half of the year and into 2026.
The report from RBC Capital underlined the resilience of Otis’s business model, even in the face of these challenges. The firm’s analysts believe that the company’s fundamentals remain strong, and they expect that Otis will continue to see development, particularly in the latter half of the year.
The price target reduction reflects the immediate impact of the announced guidance cut and the current performance of the M&R segment. Nonetheless, the Outperform rating indicates that RBC Capital Markets still sees Otis as a favorable investment option with positive prospects in the medium to long term.
Otis Worldwide Corp, a leader in the elevator and escalator industry with a market capitalization of $36.68 billion, has been focusing on expanding its service portfolio and maintaining a steady stream of revenue through its maintenance and repair services. The company’s strategy, supported by a moderate debt level and consistent dividend growth (yield: 1.81%), is expected to bolster its financials as it moves forward. For deeper insights into Otis’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes additional ProTips and detailed analysis of the company’s market position.
In other recent news, Otis Worldwide Corporation reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.92, slightly above the forecast of $0.91. However, the company’s revenue fell just short of projections, recording $3.35 billion against an expected $3.36 billion. Despite the earnings beat, the market’s reaction was negative, reflecting concerns over the revenue miss. Otis Worldwide demonstrated resilience with a flat year-over-year net sales of $3.3 billion and a 3% increase in adjusted operating profit, accompanied by a margin expansion of 40 basis points to 16.7%. The company also reported a 12% growth in modernization orders and a 14% increase in backlog at constant currency, showcasing its strategic initiatives. Otis Worldwide’s guidance for 2025 includes net sales of $14.6 to $14.8 billion, with adjusted EPS expected to be between $4.00 and $4.10 per share. The company remains focused on its strategic shift towards a service-driven business, particularly in China. Analyst firms have not provided any recent upgrades or downgrades for Otis Worldwide, maintaining a neutral stance amid these developments.
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