Is Otis Worldwide Corp (OTIS) overvalued?
On Equity Rank's model estimate, OTIS trades close to its fair value (1% below it). Otis Worldwide Corp (OTIS) last closed at $78.96; the multi-method model fair value is $79.67.
| Price | Model fair value | Price vs model |
|---|---|---|
| $78.96 | $79.67 | 1% below |
What the answer rests on
- 2 of 8 valuation methods put OTIS's value above its price and 6 put it below, so the methods mostly agree.
- To justify today's price, OTIS's free cash flow would need to grow about 5.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 0.0% a year.
- OTIS trades at 19.9 times its last year's earnings, against a median of 24.9 for 187 profitable Industrials companies.
- Over the past year the price sat below the model fair value on 79% of trading days. The gap ranged from 14% below to 10% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind OTIS's fair value · What prices assume · Other companies