Is Now The Time To Look At Buying Otis Worldwide Corporation (NYSE:OTIS)?
Let's talk about the popular Otis Worldwide Corporation (NYSE:OTIS). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Otis Worldwide’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Otis Worldwide
Is Otis Worldwide Still Cheap?
According to our valuation model, Otis Worldwide seems to be fairly priced at around 6.15% above our intrinsic value, which means if you buy Otis Worldwide today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $94.42, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Otis Worldwide’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Otis Worldwide generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 28% over the next couple of years, the future seems bright for Otis Worldwide. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? OTIS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on OTIS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 3 warning signs for Otis Worldwide (1 doesn't sit too well with us) you should be familiar with.
If you are no longer interested in Otis Worldwide, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
