Otis Worldwide shares rating downgraded, Wolfe sees tough 2025 setup

Investing.com  |  Editor Natashya Angelica

Published Dec 12, 2024 20:36

Otis Worldwide shares rating downgraded, Wolfe sees tough 2025 setup

On Thursday, Wolfe Research adjusted its stance on shares of Otis Worldwide Corp (NYSE: NYSE:OTIS), shifting the rating from Peerperform to Underperform, with a price target (PT) set at $104.00. The downgrade reflects the firm's anticipation of challenging conditions for the company in the upcoming year.

According to InvestingPro data, seven analysts have recently revised their earnings estimates downward, with analyst targets ranging from $79 to $116. The stock, currently trading at $98.99, appears to be trading above its Fair Value based on comprehensive analysis.

The analysis by Wolfe Research points to several headwinds for Otis Worldwide in 2025. The firm predicts that the construction markets in China are expected to decline once more, which could impact Otis's performance. With a market capitalization of $39.51 billion and a P/E ratio of 24.54, InvestingPro analysis indicates the company is trading at a high P/E relative to near-term earnings growth.

Moreover, concerns such as price deflation, credit risks, and escalating trade tensions between the U.S. and other trading partners are seen as potential obstacles for the company.

The Wolfe Research report highlights a less optimistic outlook than other industry observers. The downgrade comes at a time when Otis Worldwide, a company specializing in elevators and escalators, is navigating a complex global economic landscape. The factors mentioned by Wolfe Research could influence the company's strategic decisions and financial planning for 2025.

Investors and market watchers will be closely monitoring Otis Worldwide's response to these challenges as the company prepares for the anticipated market conditions in 2025. The Wolfe Research downgrade serves as a signal to the market regarding the firm's projections for Otis Worldwide's financial trajectory in the near future.

In other recent news, Otis Worldwide Corp has experienced meaningful developments in its financial performance. The company's Q3 2024 financial results showed net sales reaching $3.5 billion, primarily driven by a rise in the Service segment, while New Equipment orders, particularly in China, experienced a decline. Despite these challenges, Otis projects overall sales growth and an increase in adjusted EPS for the upcoming year.

The firm has also issued $600 million in 5.125% notes due 2031 and its subsidiary, Highland Holdings, issued €850 million in 2.875% notes due 2027. The proceeds from these offerings will be used for debt repayment and other corporate needs. Additionally, a dividend of $0.39 per share has been announced by Otis Worldwide.

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Barclays (LON:BARC) has downgraded Otis Worldwide stock to Underweight, due to anticipated challenges in the company's earnings and valuation, influenced by weaker non-residential construction activity, particularly in multi-family and office segments. The analyst from Barclays expressed concerns about the impact of current construction trends on Otis Worldwide's financial performance.

These are recent developments and it is important for investors to keep up-to-date with the company's news.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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