Otis Finishes 2022 With Solid Results

Otis reported solid fourth-quarter and full-year 2022 results, in line with our 2022 expectations of 2.5% organic revenue growth, driven by services and a 30-basis-point operating income margin improvement, also helped by service revenue growth. Otis' 2023 guidance for 4%-6% organic revenue growth is in line with our forecasts. The company's order book provides a high level of visibility into 2023. Otis finished the year with a $18.2 billion backlog, including new equipment and services, up 6% year over year. Execution on these orders will drive revenue through 2023. We forecast revenue to grow 5% organically, or about double 2022's revenue growth rate. We are maintaining our wide moat rating and $73 fair value estimate. Shares look richly valued.