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Opinions Christine Poole
Otis Worldwide Corp.OTISTOP PICKMay 13, 2020
Christine PooleStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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#1 in new equipment, with 19% market share. Global, over 70% of operations outside NA. Service side is very high margin. Package deal of elevator + service contract is about 60%, increasing over time. Aging elevators. Long-term, attractive growth. Yield is 1.6%.
(Analysts’ price target is $90.33)Christine Poole
Today, they reported a solid quarter: a modest top and bottom line beat, and strong and surprising organic growth. Shares have already rallied 32% from last fall's bottom, it popped another 2.8% today to make a new 52-week high. Wall Street remains bearish on non-residential construction, which benefits Otis.
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She's likes the elevator industry; it's an oligopoly. The servicing side of the business has high, recurring margins. This would cushion the company if we enter weaker economic times. Last year saw growth for Otis in China. Also, elevators in Europe are aging, where Otis has a big slice of the market. Another tailwind is workers returning to offices and those buildings need elevators. Also, Otis is making their elevators go digital which helps servicing. Otis shares have pulled back with the market, but she would slowly add more shares.
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James TelfserChristine PooleChristine Poole
This company was a spin off from from the OTX purchase by RTN and started trading April 3. They are the global leader in the elevator industry. They have a 17% market share. Service is 50% of their revenues but 80% of their profits. They usually have a 93% retention for this business. They suggest after COVID social distancing may lead to higher elevator usage and higher service requirements. Yield 0.4% (Analysts’ price target is $57.17)