- Price
- $64.32 → $66.45(+3.3%)
- Discount
- 38.7% → 36.7%(−2.0 pts)
- Next earnings
- 2026-11-04 → 2026-10-28
- Next earnings is estimate
- Yes → No
- Thesis
- The market is pricing in two worries about Otis: labor and training costs squeezing Service margins, and a shrinking New Equipment market in China. Otis already cut its 2026 profit guidance once, in July, after new-mechanic training costs ran higher than planned. Investor uncertainty grew further when CEO Judy Marks announced her retirement in September 2026, with no successor named yet. The gap can close if margin pressure eases as recently hired mechanics finish training. Later quarters should start to show this. It also needs modernization sales, up 24% organically with a 26% higher backlog, to keep converting into revenue regardless of what China's new-equipment market does. A smooth, well-communicated CEO transition would remove a second source of uncertainty. Otis is expected to reportreports third-quarter 2026 results around lateon October 202628, 2026. This is the next test of whether margins are stabilizing. The CEO search is expected to conclude by mid-2027, at the latest by July 31, 2027. If margins stabilize and a strong successor is named within that window, the discount can close over the next three to five quarters. If China keeps shrinking or another guidance cut follows, the stock could stay cheap well into 2027.
- Checkpoints
- Nov 4Oct 28, 2026 (estimate): Q3 2026 results: Service margin and 2026 guidance. Pending. Watch: A stable or higher Service margin and reaffirmed adjusted EPS guidance of $4.01 to $4.05 pass; a further margin drop or a second guidance cut fails.
Jan 2027 (estimate): Full-year 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with adjusted EPS growth and higher Service margins passes; flat or lower EPS guidance or more China weakness fails.
Jul 31, 2027: Board names successor to CEO Judy Marks. Pending. Watch: A successor named by July 31, 2027, ideally in the first half of 2027, with a clear plan passes; a missed deadline or a disruptive change in strategy fails.
- Recent events
- 2026-10-07: Otis said it will report Q3 2026 results and discuss its 2026 outlook on a conference call on October 28, 2026, at 8:30 a.m. ET.
2026-09-15: Otis announced that CEO, Chair, and President Judy Marks will retire once a successor is appointed, expected in the first half of 2027, or by July 31, 2027 at the latest. The board is running a search with Spencer Stuart, considering internal and external candidates.
2026-07-22: Otis reported Q2 2026 results. Net sales grew 7% to $3.86 billion, 6% organic. Service sales grew 9% organic, led by 24% modernization growth, while New Equipment sales fell 1% organic. Adjusted EPS was $1.01, down 4%, as adjusted operating margin fell 180 basis points to 15.2%. The stock fell about 2% on the day.
2026-07-22: Management cut full-year 2026 adjusted EPS guidance to $4.01-$4.05, citing about $50 million of additional productivity and cost headwinds from labor inflation, materials, and the longer time it takes to onboard newly hired mechanics.
2026-04-22: Otis reported Q1 2026 results. Net sales grew to $3.57 billion, 1% organic. Service sales grew 11%, while New Equipment sales fell 1%. New Equipment orders grew 20% in North America but fell in the low teens in China. Management slightly raised full-year 2026 net sales guidance to $15.1-$15.3 billion.
2026-04-21: The board raised the quarterly dividend 5% to $0.44 per share, payable June 12, 2026. Management said the dividend has grown about 120% since the 2020 spin-off from United Technologies.
2026-04-13: Otis completed its acquisition of a majority stake in WeMaintain, a Paris-based, 350-person elevator service technology company that uses IoT and AI tools for maintenance. Financial terms were not disclosed, and WeMaintain continues to run as an independent company.