Otis Earnings: Service and Modernization Strength Offsets Weak Equipment Demand in Late 2023

Our 2023 estimates for Otis Worldwide are little changed, with the wide-moat stock’s performance tracking largely in line with our expectations. Demand for new elevator equipment remained weak during the quarter. Still, we’ve nudged our full-year EBIT and EPS forecasts up by about 1% each—to USD 2.3 billion and USD 3.52, respectively—with Otis’ service and modernization business continuing to display considerable buoyancy in late 2023. Otis shares screen attractively relative to our unchanged USD 98 fair value estimate.