Otis Worldwide Co (NYSE: OTIS) has confirmed that it will release its Q4 2021 earnings results on Monday, January 31, 2022.
What to look for
Earnings: Stockearning’s Estimated EPS for Q4 2021 is expected to be around $0.68 per share. In the last quarter, the company had EPS of 0.77, beating estimates of $0.73. A year ago, the company reported earnings of $0.69 per share. For the full year, the company expects EPS of $3, and for the next fiscal year, it anticipates EPS of $3. Historical EPS performance shows that the company has, in the past 12 quarters, topped estimates seven times (100%) and never missed estimates (0%).
Revenue: The company expects current fiscal quarter sales to be around $3.58 billion compared to sales of $3.49 billion a year ago, suggesting a YoY growth of 3.6%. Otis Worldwide saw revenue growth of 10% YoY. In the last quarter, the company had revenue of $3.62 billion, beating consensus estimates of $3.55 billion. For the full year, Otis Worldwide expects to post sales of $14.31 billion, and for the next financial year, revenue is pegged at $14.58 billion.
Stock movement: OTIS shares have lost 2.9% since the company released its third-quarter earnings. Interestingly, OTIS shares have been UP 4 times out of the past 7 quarters. So, the historical price reaction suggests a 57% probability of the share price going UP once the company reports its fiscal Q4 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 3%, while the predicted move on the seventh day is 4%.
What analysts are saying
Wells Fargo analyst Joseph O’Dea commenced coverage in Otis Worldwide with a Sell rating on the stock and a price target of $72, highlighting his view as a “valuation call with optionality on China property market uncertainty.” The analysts said that his call is not a cautious perspective on near-term targets since he believes the company can grow its sales in the low-to-mid-single digits range and operating profit in the mid-single digits or more. However, O'Dea doesn't see considerable upside to surprise risks and feels there is good value in other building tech firms.
Barclays analyst Julian Mitchell raised his price target on OTIS from $86 to $89 but maintained a Buy rating on the stock. The analyst anticipates a "mixed investor reaction" to the multi-industry sector's Q3 earnings. Mitchell told investors in a research note that investor concerns about supply chains and pricing pressures have lowered the bar, creating the possibility of a "catch-up trade. However, he believes that the stock's upside would be limited by initial revenue forecasts for 2022, which he describes as "unlikely to be extremely interesting."
According to JPMorgan analyst Stephen Tusa, Otis Worldwide stock has been sluggish recently due to "genuine" concerns about property fundamentals in China. On the other hand, the expert believes that the sell-off is exaggerated and that China is not the underlying risk that it is portrayed to be. In a research note, Tusa informs investors that China accounts for 17 percent of Otis' revenue, "which is high on a rudimentary look. The Evergrande crisis is "acute and already impacting property markets," according to the analyst. Tusa added that contagion is a risk, but this is not specific to Otis, and he doesn't see a double drop in China. As a result, he maintains a Buy rating on the stock with a price objective of $95 on OTIS.
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