OTIS - Otis Worldwide: A Transformational Industrial Compounder

• I see Otis as a long-term compounder from here and estimate a price target of $260 over a 10-year period (4x the current stock price of $65, a CAGR of 15%).
• Otis will capture market share in a fragmented elevator maintenance market for years to come by deploying technology (IoT, sensors, analytics) into elevators.
• As they fill in their network with share gains, incremental margins come in higher as it doesn’t cost much more to service an elevator where they already have mechanics.
• Otis is a high-quality company with enduring moats, a capital-light business model, and recurring revenues. The stock is a long-term investment offering high returns with below-average risk.

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