Otis Worldwide

Otis Worldwide is the world's largest maker and servicer of elevators and escalators, spun off from United Technologies in April 2020. It splits its business into two segments. New Equipment designs, manufactures, sells, and installs new elevators and escalators, mostly for real estate developers, contractors, and government infrastructure projects; in 2025 it made up 35% of net sales but only 9% of segment operating profit.

Service performs maintenance, repair, and modernization on elevators already installed, including units originally made by other manufacturers; it made up 65% of 2025 sales but 91% of segment operating profit, and every new unit Otis installs becomes a candidate for a future maintenance contract. Otis maintains a portfolio of about 2.5 million units worldwide, the largest maintenance base in the industry, which gives it a recurring, high-margin revenue stream that is hard for a new entrant to match. Otis operates in more than 200 countries and territories, with about 71% of 2025 sales coming from outside the United States.

China, once a large source of new elevator orders, has kept shrinking as a share of new equipment demand since 2023, so Otis has been shifting its China business toward service contracts instead. In April 2026, Otis took a majority stake in WeMaintain, a Paris-based elevator service company that uses IoT sensors and AI to plan maintenance. WeMaintain continues to run as an independent business alongside Otis's own service network.

The market is pricing in two worries about Otis: labor and training costs squeezing Service margins, and a shrinking New Equipment market in China. Otis cut its 2026 profit guidance twice, in April and again in July. In July, management said that newly hired mechanics took longer to become productive than planned. Investor uncertainty grew further when CEO Judy Marks announced her retirement in September 2026, with no successor named yet.

The gap can close if margin pressure eases as recently hired mechanics finish training. The Q3 2026 report on October 28, 2026 gave a first sign. The Service margin rose to 24.2% from 23.2% in Q2 2026, and Otis kept its adjusted EPS guidance. But the Service margin was still 130 basis points lower than a year earlier, and New Equipment sales in China fell more than 20%.

Modernization must also keep turning into revenue, even if China's new-equipment market falls further. Organic modernization sales grew 20% in Q3 2026, and the modernization backlog was 20% higher. A smooth, well-communicated CEO transition would remove a second source of uncertainty. The next test is the full-year 2026 report with the 2027 outlook, expected in late January 2027.

The board expects the new CEO to start in the first half of 2027, and Marks retires on July 31, 2027 at the latest. If margins keep recovering and a strong successor starts within that window, the discount can close over the next three to five quarters. If China keeps shrinking or the 2027 outlook shows no profit growth, the stock could stay cheap well into 2027.

1. Oct 28, 2026Passed

   Q3 2026 results: Service margin and 2026 guidanceA Service margin above the Q2 2026 level of 23.2% and adjusted EPS guidance of $4.01 to $4.05 kept pass; a lower Service margin or a third guidance cut fails.Outcome: The Service margin rose to 24.2% from 23.2% in Q2 2026 and Otis kept its adjusted EPS guidance of $4.01 to $4.05, but it lowered its free cash flow guidance to about $1.5 billion.
2. Jan 28, 2027 · est.Pending

   Full-year 2026 results and 2027 outlookA 2027 outlook with adjusted EPS growth and higher Service margins passes; flat or lower EPS guidance or more China weakness fails.
3. Jul 31, 2027Pending

   New CEO starts before Judy Marks retiresA successor who starts by July 31, 2027, Marks's latest retirement date, ideally in the first half of 2027, with a clear plan passes; no successor by that date or a disruptive change in strategy fails.

Every passed and failed checkpoint across all picks

• November 2, 2026Otis sold $500 million of 5.825% notes due 2036. The sale closed on November 5, 2026. Otis plans to use the money, with cash on hand, to repay its $500 million of 2.293% notes when they become due on April 5, 2027.
• October 28, 2026Otis reported Q3 2026 results. Net sales grew 6% to $3.91 billion, 6% organic. Service sales grew 7% organic, with modernization up 20% and maintenance and repair up 4%. New Equipment sales grew 3% organic, but sales in China fell more than 20%. The Service segment margin was 24.2%, 100 basis points higher than in Q2 2026 but 130 basis points lower than a year earlier. Adjusted EPS was $1.05, flat. Otis kept its 2026 guidance of net sales of $15.1 to $15.3 billion and adjusted EPS of $4.01 to $4.05. It set its adjusted free cash flow guidance at about $1.5 billion, from $1.50 to $1.55 billion.
• October 7, 2026Otis said it will report Q3 2026 results and discuss its 2026 outlook on a conference call on October 28, 2026, at 8:30 a.m. ET.

Last earnings

October 28, 2026 (8-K on sec.gov)

Next earnings

Expected about January 28, 2027. The company has not confirmed the date.

• 8-KOther company newsFiled November 5, 2026 · Read it on sec.gov
• 10-QQuarterly report for the period ended Sep 30, 2026Filed October 29, 2026 · otis-20260930
• 8-KEarnings releaseFiled October 28, 2026 · Press release and exhibits
• 8-KChange of directors or officers and Investor disclosureFiled September 15, 2026 · Read it on sec.gov
• 10-QQuarterly report for the period ended Jun 30, 2026Filed July 23, 2026 · otis-20260630
• 8-KEarnings releaseFiled July 22, 2026 · Press release and exhibits
• 8-KShareholder vote resultsFiled May 29, 2026 · otis-20260527
• 8-KOther company newsFiled May 7, 2026 · Read it on sec.gov
• 10-QQuarterly report for the period ended Mar 31, 2026Filed April 23, 2026 · otis-20260331
• 8-KEarnings releaseFiled April 22, 2026 · Press release and exhibits

Every filing on SEC EDGAR (CIK 1781335)

• Otis cut its 2026 profit guidance twice, in April and July 2026, as labor inflation, materials costs, and the time needed to train newly hired mechanics have pressured Service margins (adjusted operating margin fell 180 basis points in Q2 2026 and 110 basis points in Q3 2026). The Service margin rose from Q2 to Q3 2026, but it stayed lower than a year earlier. If these cost pressures do not ease, profit growth will stay muted even as sales grow.
• China, once a major source of new elevator orders, has kept shrinking: New Equipment orders there fell in the high teens in Q2 2026 and in the low teens in Q3 2026, and New Equipment sales there fell more than 20% in Q3 2026. A deeper or longer Chinese property downturn would keep dragging on New Equipment sales, and eventually on the size of the maintenance portfolio those units would have added to Service.
• CEO Judy Marks, who has led Otis since its 2020 spin-off, announced her retirement in September 2026. The successor is expected to start in the first half of 2027, and Marks retires by July 31, 2027 at the latest. The search adds uncertainty about strategic continuity while margins are already under pressure.
• New Equipment is only about 9% of segment operating profit, but it seeds Otis's future maintenance base. Continued weak New Equipment sales and orders could slow the growth of the higher-margin Service portfolio that its profit depends on.
• Otis's business rests on maintaining about 2.5 million elevators and escalators worldwide, so equipment failures, accidents, or safety recalls can lead to lawsuits, regulatory scrutiny, or reputational harm.
• Otis operates in more than 200 countries and territories, exposing it to currency swings, tariffs, and geopolitical disruption. In April 2026, management said that the Middle East conflict could cost $5-10 million of profit per quarter if it continued. In July 2026, management said that price increases broadly offset this cost.
• The elevator and escalator maintenance market is competitive, with large global rivals such as Schindler, KONE, and TK Elevator, plus many local independents. Aggressive pricing to win or keep service contracts could pressure margins further.

Otis has negative equity: a total equity deficit of $5.3 billion at September 30, 2026. It took on debt at its 2020 spin-off from United Technologies and has bought back shares since then, but this is not a sign of distress. Read more

Yield at the current rate

2.3% (current annual rate, at today’s price)

Dividend yield

2.2% (last 12 months, at today’s price of $77.50)

Paid per share

$1.72 in the last 12 months (4 payments)

Current annual rate

$1.76 ($0.44 × 4 a year)

Payout ratio

47% of the last fiscal year’s earnings (the year that ended December 31, 2025)

Latest ex-dividend date

August 14, 2026, $0.44 per share

Dividends per share by year

From 2020 to 2025, the dividend grew by about 22.4% a year.

Source: company filings and market data, read on November 13, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.