Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Otis delivered a mixed set of results for the last quarter.</li><li>The company saw a good growth in organic sales but failed to meet the revenue expectations of Wall Street.</li><li>Its expansion in margins did result in the company delivering an earnings beat.</li></ul>

Otis delivered a mixed set of results for the last quarter.The company saw a good growth in organic sales but failed to meet the revenue expectations of Wall Street.Its expansion in margins did result in the company delivering an earnings beat.

Otis Worldwide Corp: New Contracts For Gen 2 & Other Drivers

<ul><li>Otis had a decent quarter with growth in organic sales and expansion in margins though it failed to meet market expectations on the revenue front.</li><li>In the quarter, the net sales were down mainly because of the wide strengthening of the U.S. dollar.</li><li>The service business of Otis grew sales and expanded margins.</li></ul>

Otis had a decent quarter with growth in organic sales and expansion in margins though it failed to meet market expectations on the revenue front.In the quarter, the net sales were down mainly because of the wide strengthening of the U.S. dollar.The service business of Otis grew sales and expanded margins.

Equity Capital Markets

<ul><li>Despite various macro challenges, Otis closed the year with a strong performance with growth of adjusted operating profit and organic sales.</li><li>The company generated $1.6 billion in free cash flow with the introduction of new innovative solutions for its passengers and customers.</li><li>Otis received an order for approximately 280 units supporting the new Terminal 3 concourse and building of Taiwan Taoyuan International Airport.</li></ul>

Despite various macro challenges, Otis closed the year with a strong performance with growth of adjusted operating profit and organic sales.The company generated $1.6 billion in free cash flow with the introduction of new innovative solutions for its passengers and customers.Otis received an order for approximately 280 units supporting the new Terminal 3 concourse and building of Taiwan Taoyuan International Airport.

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/otis-worldwide-corp" target="_blank" data-smartkarma-citation="entities:34334:1" rel="noopener">Otis Worldwide Corp (OTIS US)</a> increases its stake in <a href="https://www.smartkarma.com/entities/zardoya-otis-sa" target="_blank" data-smartkarma-citation="entities:21307:1" rel="noopener">Zardoya Otis SA (ZOT SM)</a> to 95.51% after the takeover bid. The settlement date is 12 April.</li>
<li>Otis has decided to proceed with the squeeze-out. Next 3 May will be the date.</li>
<li>The outcome is in line with expectations and my recommendation to tender. Gross spread is 0.43%, and 6.31% is the estimated annualised return (assuming settlement on 6 May).</li>
</ul>



Otis Worldwide Corp (OTIS US) increases its stake in Zardoya Otis SA (ZOT SM) to 95.51% after the takeover bid. The settlement date is 12 April.
Otis has decided to proceed with the squeeze-out. Next 3 May will be the date.
The outcome is in line with expectations and my recommendation to tender. Gross spread is 0.43%, and 6.31% is the estimated annualised return (assuming settlement on 6 May).


<ul>
<li>After <a href="https://www.opazardoyaotis.com/files/folleto-informativo-opa-zardoya-otis.pdf" target="_blank" rel="noopener">prospectus</a> approval, the acceptance period runs from 2 March until 1 April. Interloper risk is nil. Gross spread is a tiny 0.3%. Recommendation is long and tender.</li>
<li>I still consider the offer to be cheeky: it implies 22.3x Fwd P/E and 13.9x EV/Fwd EBITDA, below the median of comparables at 26.5x Fw P/E and 15.8x EV/Fwd EBITDA.</li>
<li>But the risks of not tendering are: share price dropping in the current Ukraine crisis context, reduced liquidity, and Otis may carry out a delisting if it reaches 75% acceptances.</li>
</ul>


After prospectus approval, the acceptance period runs from 2 March until 1 April. Interloper risk is nil. Gross spread is a tiny 0.3%. Recommendation is long and tender.
I still consider the offer to be cheeky: it implies 22.3x Fwd P/E and 13.9x EV/Fwd EBITDA, below the median of comparables at 26.5x Fw P/E and 15.8x EV/Fwd EBITDA.
But the risks of not tendering are: share price dropping in the current Ukraine crisis context, reduced liquidity, and Otis may carry out a delisting if it reaches 75% acceptances.


United States

Otis Worldwide Corporation manufactures, installs, and services building systems. The Company offers elevators, escalators, and other moving products. Otis Worldwide serves customers worldwide.

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Otis Worldwide (OTIS US)

Otis Worldwide Corp: New Contracts For Gen 2 & Other Drivers

Otis delivered a mixed set of results for the last quarter. The company saw a good growth in organic sales but failed to meet the revenue...

Baptista Research

Otis Corp: Major Drivers

Otis had a decent quarter with growth in organic sales and expansion in margins though it failed to meet market expectations on the revenue...

Baptista Research

Otis Worldwide Corp.: Investment Thesis

Despite various macro challenges, Otis closed the year with a strong performance with growth of adjusted operating profit and organic sales. The...

Baptista Research

Otis/Zardoya Otis: Squeeze-Out

Otis obtains 95.51% after the end of the offer period. The outcome is in line with expectations. Gross spread is 0.43%, and 6.31% is the estimated...

Jesus Rodriguez Aguilar

Otis/Zardoya Otis: Game Almost Over

The acceptance period will run from this Wednesday, 2 March, until 1 April. The Zardoya dividends are expected to be postponed. There's no...

Jesus Rodriguez Aguilar

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