Otis Worldwide Corporation (OTIS): A Bull Case Theory 

We came across a bullish thesis on Otis Worldwide Corporation on Timeless’s Substack by Timeless Compounders. In this article, we will summarize the bulls’ thesis on OTIS. Otis Worldwide Corporation’s share was trading at $87.16 as of January 29th. OTIS’s trailing and forward P/E were 24.90 and 19.65, respectively according to Yahoo Finance.

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. OTIS returned to growth in Q3 2025, marking a meaningful step forward after several quarters of stagnation. Organic sales increased 2%, driven by strong service performance and a 27% surge in Modernization orders, even as New Equipment remained challenged, particularly in China. The service segment, which is the core engine of Otis’ investment case, posted 6% organic growth with margins reaching a best-in-class 25.5%, supported by accelerating repair revenue and a steadily growing Maintenance & Repair business.

Management acknowledged a customer retention issue, but ongoing efforts aim to restore rates to the 94% target. Modernization emerged as a clear multi-year growth driver, with a 27% order increase and 22% backlog growth, outpacing European peers KONE and Schindler, as Otis captures the aging building trend aggressively. New Equipment trends improved, with declining volumes in China stabilizing and margins supported by $20M in productivity savings, reflecting disciplined cost management.

Otis’ adjusted free cash flow of $337M in Q3, $766M year-to-date, and ongoing share buybacks demonstrate strong capital allocation, while the company raised the midpoint of its adjusted EPS guidance to $4.04–$4.08 despite $30M in tariff and wage headwinds. Strategic project wins, including major modernization and high-end new installations across New York, Shanghai, Dubai, Seoul, and San Francisco, highlight Otis’ global execution capabilities.

Overall, Q3 confirms Otis’ resilience: service and modernization growth, margin expansion, and disciplined cash flow position the company for steady long-term earnings growth, even as New Equipment challenges persist. The market’s focus on short-term weakness may obscure the underlying strength, creating an attractive entry point for investors seeking a profitable, service-driven industrial leader with a durable global footprint.

Previously, we covered a bullish thesis on Otis Worldwide Corporation (OTIS) by Brass Tacks Cap in October 2024, which highlighted the company’s scale, strong service segment, high customer retention, and modernization opportunities. OTIS’s stock price has depreciated by approximately 15.68% since our coverage. Timeless Compounders shares a similar perspective but emphasizes Q3 2025 growth and modernization acceleration.

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Disclosure: None.