Based in Farmington, Connecticut, Otis Worldwide Corporation (OTIS) engages in manufacturing, installation, and servicing of elevators and escalators. Valued at a market cap of $37.3 billion, the company developed a range of elevator and escalator solutions, including Gen360 elevator & Gen2 systems, and has a maintenance portfolio of more than 2 million units throughout the globe.

Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Otis fits this criterion perfectly. Otis has built a solid market presence, driven by its leadership in the elevator and escalator industry, providing essential services for the installation, maintenance, and modernization of vertical transportation systems. 

Shares of OTIS are trading 10.4% below its 52-week high of $100.84, reached on Jun. 6. OTIS has declined 6.4% over the past three months, lagging behind the broader Industrial Select Sector SPDR Fund’s (XLI) 2.6% gain over the same time frame.

In the longer term, OTIS stock is up marginally on a YTD basis but lagged behind XLI’s 9.8% gains. Shares of OTIS have gained 8.9% over the past 52 weeks, underperforming XLI’s 18.5% returns over the same time frame.

OTIS has recently been trading below its 50-day moving average, representing a bearish trend.  

On Jul. 24, shares of OTIS fell 7.1% after its Q2 earnings release. The company reported revenues of $3.6 billion, missing the Wall Street estimates by 2.9%. However, the company reported adjusted EPS of $1.06, surpassing Street’s $1.03 per share estimates. Moreover, it expects full-year earnings from $3.85 to $3.90 per share, with revenue from $14.3 billion to $14.5 billion.

OTIS' underperformance becomes more evident compared to its rival, Carrier Global Corporation’s (CARR) 23.2% gain on a YTD basis and 20% returns over the past 52 weeks.
Despite OTIS’ underperformance relative to the broader sector, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 11 analysts in coverage, and the mean price target of $98.78 suggests a premium of 9.3% to its current levels. 

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