CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
OTIS posted Q1 operating EPS of $0.89, missing consensus by $0.01, with net sales rising 6% to $3.566B (+1% organic). Service sales grew 11% to $2.4B (+5% organic), led by repair services expanding 16%, while New Equipment declined 1% to $1.1B (-5% organic), pressured by 20%+ China weakness. We believe the market shift toward optimizing current assets over new equipment installation supports OTIS's service-driven model, with modernization backlog expanding 32% and providing future revenue visibility. Management indicated efforts to reverse margin compression, though recovery may take time, in our view. Service margins contracted 160 bps to 23% due to higher labor costs and growth investments, while New Equipment margins compressed 240 bps to 3.3% from volume declines and pricing deflation. We expect the Service segment's resilient fundamentals and growing backlog to support future performance despite near-term margin headwinds.