Q1 2025 - Otis Worldwide - Analysis
Fairly limited tariff impact, emerging FX tailwinds, and a Service-driven cash flow model
Today, before the bell, Otis Worldwide reported its Q1 2025 earnings. At the time of writing, Otis shares are down 6%. Let’s review the results in more detail. As a reminder, we shared our deep dive late June last year.
We’d summarize the quarter as fairly in-line, despite ongoing weakness in China on the New Equipment side. Otis’ high-margin Maintenance & Repair segment continues to provide reliable cash flow, while double-digit growth in Modernization remains on track. At constant currency, Otis delivered roughly 5% growth in NOPAT per share, on top of last year’s 12%.
Including dividends, earning low-double digit IRRs remains intact, but at the right entry price. If you’ve been following our work for quite some time, you know we’ve been waiting for better buying opportunities in Otis.
Is now the moment to act?
Let’s take a closer look.