SHALF - Otis: Resilient Q3 Results Point To 51% Upside By 2023 Year-End
- Otis's Q3 results showed the resilience of elevator businesses, with sales down only 1.2% year-on-year (they were down only 6.5% in Q2).
- Cost savings helped EBIT grew 7.0% year-on-year in Q3; leverage, lower interest and a lower tax rate helped EPS grew 24.3% year-on-year.
- Orders remained broadly stable, with New Equipment orders down 1.2% in the last 12 months; the backlog was slightly up with flat margins.
- 2020 outlook has been revised upwards, with Otis expecting an organic sales decline of only 2-3% and a flat Free Cash Flow year-on-year.
- With shares at $61.97, an exit price of $89.97 plus dividends imply a total return of 51% (14.1% annualised) by 2023 year-end. Buy.
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Otis: Resilient Q3 Results Point To 51% Upside By 2023 Year-End