DCF Studio

    OTIS · NYQ · Industrials

    Otis Worldwide Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 73.36

    Market price

    USD 78.37

    Implied upside

    -6.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.94% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 73.36-6.4%
    Exit multiple
    USD 82.55+5.3%
    Market price
    USD 78.37

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 15.3bnUSD 16.0bnUSD 16.7bnUSD 17.3bnUSD 18.0bnUSD 18.6bnUSD 19.2bnUSD 19.7bnUSD 20.3bnUSD 20.8bn+3.4%
    EBITUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bn+3.4%
    NOPATUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.5bn+3.4%
    Add depreciation & amortisationUSD 200.8mUSD 209.6mUSD 218.2mUSD 226.8mUSD 235.1mUSD 243.2mUSD 251.0mUSD 258.4mUSD 265.5mUSD 272.1m+3.4%
    Less capital expenditureUSD -153.4mUSD -166.5mUSD -180.0mUSD -193.9mUSD -208.2mUSD -222.8mUSD -237.5mUSD -252.4mUSD -267.4mUSD -282.4m+7.0%
    Capex, % of revenue1.0%1.0%1.1%1.1%1.2%1.2%1.2%1.3%1.3%1.4%-
    Less increase in working capitalUSD -135.6mUSD -100.4mUSD -99.2mUSD -97.5mUSD -95.2mUSD -92.4mUSD -89.0mUSD -85.1mUSD -80.7mUSD -75.8m-6.3%
    Free cashflow to firmUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.3bnUSD 2.4bn+3.6%
    Discount factor0.96220.89080.82470.76360.70690.65450.60590.56100.51940.4808-
    Present valueUSD 1.7bnUSD 1.7bnUSD 1.6bnUSD 1.5bnUSD 1.5bnUSD 1.4bnUSD 1.3bnUSD 1.3bnUSD 1.2bnUSD 1.2bn-
    Present Value Of The ForecastUSD 14.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.910Reported 0.866, pulled toward 1.0 (Blume)
    Cost of equity8.74%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 29.8bn77.8% of capital
    Total debtUSD 8.5bn22.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.01%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 73.36

    61% of EV

    Forecast FCFF, final year
    USD 2.4bn
    Capex at depreciation, working capital in reinvestment
    USD 2.6bn
    Less reinvestment at g/ROIC (4.2% of NOPAT)
    USD -107.0m
    Capitalised
    USD 2.5bn
    ROIC (reported)
    60.0%
    Terminal value, undiscounted
    USD 45.8bn
    Terminal value, discounted
    USD 22.0bn
    Enterprise value
    USD 36.4bn
    Less net debt
    USD 7.4bn
    Equity value
    USD 29.0bn

    Exit at 15.6x EBITDA

    Value per shareUSD 82.55

    64% of EV

    Terminal value, undiscounted
    USD 53.3bn
    Terminal value, discounted
    USD 25.6bn
    Enterprise value
    USD 40.0bn
    Less net debt
    USD 7.4bn
    Equity value
    USD 32.6bn

    Spread between methods: 12%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.01%103.25112.96125.46142.17165.57
    7.01%80.9086.6293.63102.42113.74
    8.01%65.4569.0773.3678.5384.88
    9.01%54.1356.5459.3362.6066.49
    10.01%45.5047.1549.0451.2253.75

    Outlined: this model. Green text: above today's price of 78.37. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year1.8%3.7%4.4%
    EBIT margin15.8%15.2%16.0%
    Discount rate-8.0%7.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.