Otis Worldwide Corporation (OTIS) Stock Valuation — PE Analysis
Industrial - Machinery · NYSE
Current Price
$72.29
PE Ratio (TTM)
18.9x
Intrinsic Value
$97.79
+26.1% margin of safety
COMPETITIVE MOAT
↑Skilled Labor Demand
High demand for skilled elevator mechanics, with potential earnings exceeding $150,000, creates a barrier to entry for new competitors. Otis's ability to attract and retain this specialized workforce is a significant advantage.
↑Modernization Services
Otis offers new commercial escalator modernization packages, including preassembled modules. This streamlines installation and improves safety, providing ongoing revenue streams and customer lock-in.
↑Global Service Network
A vast global network for installation and maintenance of elevators and escalators creates significant switching costs for customers. This established infrastructure is difficult for rivals to replicate.
INVESTMENT RISKS
↓China Market Headwinds
The company faces significant headwinds in the Chinese market, which has impacted its share price. A prolonged slowdown or further regulatory changes in China could continue to pressure performance.
↓Share Price Volatility
Otis's share price has experienced substantial declines, indicating investor concerns and market sensitivity. This volatility can deter new investment and impact capital raising efforts.
↓Talent Acquisition Challenges
Despite high earning potential, the CEO notes difficulty in hiring enough skilled elevator mechanics. This labor shortage could constrain growth and impact service delivery.
Base case
OTIS base case PE valuation
A base case PE valuation for OTIS estimates a fair value of about $97.79 per share, against a current price of $72.29. The model assumes 11.6% annual earnings growth, a 19x target PE multiple, and a 10% discount rate.
Intrinsic Value
$97.79
Margin of safety
+26.1%
Expected annual return
+6.2%
Base case assumptions: 11.6% annual earnings growth, 19x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the OTIS PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Otis Worldwide Corporation respond.
Open PE Calculator for OTISCompany Overview
Otis Worldwide Corporation is a global leader specializing in the manufacturing, installation, and servicing of elevators and escalators, with significant operations in the United States, China, and numerous other international markets. The company's business is organized into two primary divisions: New Equipment and Service. Its New Equipment segment is responsible for the design, fabrication, sale, and fitting of a diverse array of passenger and freight elevators, escalators, and moving walkways, catering to residential and commercial properties, as well as large-scale infrastructure endeavors. Conversely, the Service segment offers extensive maintenance, repair, and modernization services aimed at upgrading existing elevator and escalator systems. Otis maintains a substantial global service footprint, employing approximately 34,000 service technicians across roughly 1,400 branches and offices. The company, established in 1853, is headquartered in Farmington, Connecticut.
Financial Metrics — OTIS PE Stock Valuation Data
PE Ratio (TTM)
18.9x
PEG Ratio
n/m
Earnings Yield
5.28%
ROE (TTM)
-27.1%
Revenue/Share (TTM)
$37.74
Dividend Yield
2.35%
Debt/Equity
n/m
Frequently Asked Questions
What is the PE ratio of OTIS?
The trailing twelve-month PE ratio of OTIS reflects how much investors pay per dollar of Otis Worldwide Corporation's earnings. This metric is most useful when compared to Industrial - Machinery peers and the company's own historical range.
Is OTIS overvalued based on PE ratio?
OTIS's PE of 18.9x combined with a PEG ratio of -18.19 provides a growth-adjusted perspective. OTIS has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Industrial - Machinery, a DCF analysis may be more appropriate.
How do I value OTIS stock using PE ratio?
To value Otis Worldwide Corporation using PE: (1) Compare the current PE (18.9x) against the Industrial - Machinery median to assess relative pricing, (2) check the PEG ratio (-18.19) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of OTIS?
OTIS's PEG ratio is -18.19, calculated by dividing the PE ratio (18.9x) by the expected earnings growth rate. Because OTIS has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for OTIS stock valuation?
PE ratio gives a quick relative read — how OTIS is priced versus Industrial - Machinery peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See OTIS DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value OTIS with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.