Otis Worldwide Corporation (OTIS) DCF Valuation
TGM's two-stage DCF values Otis Worldwide Corporation (OTIS) between $31.12 and $65.31 depending on assumptions, with a base case of $43.02. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (8.6%) reflects its beta.
What would today's price require?
$73.27 is justified only if free cash flow grows about +11.6% a year (fading to 2.5% long-run) at a 8.6% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 9.6% | $31.12 |
| Base case | 2.0%/yr | 8.6% | $43.02 |
| Optimistic | 5.0%/yr | 7.6% | $65.31 |
| Analyst DCF (FMP) | independent reference — different model | $89.51 | |
Current Price
$73.27
Market-Implied Growth
+11.6%/yr
vs -0.6% 5Y actual
Model Scenario Range
$31.12 – $65.31
model output — not a price target
OTIS DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for OTIS (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.4B · 0.38B shares · net debt $7.3B
Estimated Fair Value
$41.98
-42.7% vs $73.27
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $73.27; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.6% | $59.06 | $64.56 | $71.41 | $80.15 | $91.72 |
| 7.6% | $46.18 | $49.66 | $53.81 | $58.87 | $65.16 |
| 8.6% | $36.94 | $39.27 | $41.98 | $45.18 | $49.00 |
| 9.6% | $29.98 | $31.61 | $33.47 | $35.62 | $38.12 |
| 10.6% | $24.55 | $25.74 | $27.07 | $28.57 | $30.29 |
About Otis Worldwide Corporation
Otis Worldwide Corporation is a global leader specializing in the manufacturing, installation, and servicing of elevators and escalators, with significant operations in the United States, China, and numerous other international markets. The company's business is organized into two primary divisions: New Equipment and Service. Its New Equipment segment is responsible for the design, fabrication, sale, and fitting of a diverse array of passenger and freight elevators, escalators, and moving walkways, catering to residential and commercial properties, as well as large-scale infrastructure endeavors. Conversely, the Service segment offers extensive maintenance, repair, and modernization services aimed at upgrading existing elevator and escalator systems. Otis maintains a substantial global service footprint, employing approximately 34,000 service technicians across roughly 1,400 branches and offices. The company, established in 1853, is headquartered in Farmington, Connecticut.
- Sector
- Industrials
- Industry
- Industrial - Machinery
- CEO
- Judith F. Marks