OTIS - Otis: Resilient In 2020 Recovery Expected In 2021

• Otis shares are trading near their recent all-time high, but we believe they are still an attractive opportunity as a quality growth stock.
• Despite COVID, Otis's sales only fell 2.1% organically in 2020, and EBIT rose 2.8%; its tax rate was down 4 ppt and is to drop further.
• The order backlog was resilient, up 1% organically in 2020. Modernization orders and the number of Maintenance units both rose.
• Otis's 2021 outlook anticipates a broad-based demand recovery; with an FX tailwind, sales are to grow 4.5-6.5% and EBIT to grow 6.5-9.0%.
• With shares at $70.75, we expect an exit price of $106 and a total return of 57% (13.1% annualized) in just under 4 years. Buy.

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