Company Reports

We maintain our $35 fair value estimate for shares of narrow-moat Corning after its fourth-quarter results and first-quarter guidance came in line with our expectations. Corning’s results continue to weaken amid slow customer spending caused by soft consumer demand and data center inventory digestion. After a double-digit sales decline in 2023, however, we expect a return to growth in 2024. The largest driver of our recovery thesis is a return to optical fiber spending from data center customers and service providers, but we expect the recovery to be broad-based overall. Corning is now guiding to sequential growth in 2024 after the first quarter, which we think is why shares shot up 8% following the release. We see shares as fairly valued.

Corning is a materials science behemoth with differentiated glass products for televisions, notebooks, mobile devices, wearables, optical fiber, cars, and pharmaceutical packaging. In its 170 years of operation, the company has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends that it can serve through its core competency of materials science. Most recently, we point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the pivot toward growth.

We lower our fair value estimate for shares of narrow-moat Corning to $35, from $39, after management guided fourth-quarter results lower than our expectations. Corning’s reported results in the third quarter were weak, but within our expectations, as the firm continues to see softer demand for its optical fiber, which is its largest segment. We now expect this segment to stay at these depressed levels for at least two more quarters. On the bright side, we like Corning’s focus on improving profitability and cash flow while it waits for volumes to return. Despite our fair value cut, we continue to view the market as overly punitive toward Corning shares and see the stock as a buying opportunity for investors. We fully expect the company to recover from its current downcycle. Long term, we believe it is positioned for diversified growth, fueled by its centralized research and development budget that we see giving the firm a cost advantage.

Corning is a materials science behemoth with differentiated glass products for televisions, notebooks, mobile devices, wearables, optical fiber, cars, and pharmaceutical packaging. In its 170 years of operation, the company has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends that it can serve through its core competency of materials science. Most recently, we point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the pivot toward growth.

Corning is a materials science behemoth with differentiated glass products for televisions, notebooks, mobile devices, wearables, optical fiber, cars, and pharmaceutical packaging. In its 170 years of operation, the company has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends that it can serve through its core competency of materials science. Most recently, we point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the pivot toward growth.

We trim our fair value estimate for narrow-moat Corning shares to $39, from $40, following second-quarter results that lead us to temper our near-term growth assumptions for its optical fiber sales. Overall, second-quarter results and third-quarter guidance missed our expectations, and we now expect more drawn-out recoveries for markets like optical. Still, we expect improvement through 2023 and into 2024. Corning's display market appears to have rebounded from its bottom, and we believe the firm's actions on pricing will drive up profits faster than sales. We continue to see upside in Corning shares, and believe long-term investors have a good entry point for a fundamentally strong firm.

We maintain our $40 fair value estimate for narrow-moat Corning after it reported first-quarter results that met our expectations. Corning continues to see weak demand due to a softer spending environment and inventory corrections at customers. Nevertheless, the company improved profitability in the quarter and we see both sales and profits trending up through the rest of the year. We continue to see Corning as undervalued and trading at a good entry point for long-term investors.

We maintain our $40 fair value estimate for narrow-moat Corning shares after the firm reported a solid fourth quarter and guided for a weak start to 2023. Corning is feeling the brunt of another round of disruption due to COVID-19, this time from policy loosening in China that led to rising case rates and weaker consumer demand. Corning’s display, environmental, and specialty materials businesses are all impacted in China. We anticipate 2023 to rebound from a trough in the first quarter and believe Corning is managing its cost structure well in the face of weaker demand. Long term, we maintain our confidence in Corning to benefit from content growth across its end markets and for its moaty centralized cost structure to generate good profitability. We see shares as undervalued.

Corning is a materials science behemoth with differentiated glass products for televisions, notebooks, mobile devices, wearables, optical fiber, cars, and pharmaceutical packaging. In its 170 years of operation, the company has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends that it can serve through its core competency of materials science. Most recently, we point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the pivot toward growth.

We’re reducing our fair value estimate for narrow-moat Corning to $40 per share from $42 after third-quarter results led us to lower our short-term expectations. Corning’s end markets are softening in line with the macroeconomic environment, with its display glass business and overall profitability being particularly affected. While we anticipate weaker profitability through 2023, we remain confident in Corning’s long-term growth drivers and centralized cost advantage that generates strong profits through cycles and underpins its economic moat. The shares fell 5% in early market trading on Oct. 25; we continue to view Corning as undervalued even with short-term challenges.

Corning is a materials science behemoth with differentiated glass products for televisions, notebooks, mobile devices, wearables, optical fiber, cars, and pharmaceutical packaging. In its 170 years of operation, the company has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends that it can serve through its core competency of materials science. Most recently, we point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the pivot toward growth.

We maintain our $42 fair value estimate for Corning shares after it reported second-quarter results. Management guided to a slightly weaker second half of the year than our prior expectations, but this is largely due to short-term end market softness that we don’t view as indicative of fundamental or long-term weakness. We think secular demand strength, predominantly for Corning’s optical fiber, will help offset weaker demand elsewhere. We also credit the firm for maintaining good profitability amid softer demand via pricing actions. Corning’s ability to post solid growth and profitability against multifaceted end market headwinds shows the strength of its diversified end market exposure and centralized cost structure, which also informs our narrow economic moat rating. We think long-term investors have an appropriate margin of safety to get Corning at a discount.

Narrow-moat Corning beat the high end of its top-line guidance range in its first quarter and guided to a strong second quarter. Conversely, Corning continues to face increased input and logistics costs that weigh on profitability even as revenue continues to grow. As such, we’re maintaining our fair value estimate of $42 per share. Corning’s Optical segment continued to be its strongest growth outlet. This aligns with our long-term view that there will be robust demand for optical fiber as data center construction accelerates. To alleviate some margin pressure stemming from inflationary and higher input costs, Corning was able to negotiate increased prices in long-term contracts with its customers and we anticipate this trend to continue throughout 2022. Shares are up around 4% after the release based on positive annual sales guidance, and we continue to view Corning as undervalued.

Narrow-moat Corning capped off the year with strong fourth-quarter results, coming in at the top end of its guidance ranges for the top and bottom lines. We’re raising our fair value estimate to $42 per share from $40 to reflect greater confidence in Corning’s long-term optical fiber growth as it adds manufacturing capacity. We think Corning’s fourth quarter--and 2021 in general--show the firm reaping the benefits of its diverse end-market exposure and enjoying broad-based demand. We maintain our view that the firm’s optical segment will be the greatest contributor to growth in the short and long term. Corning battled margin pressure throughout 2021, but we have confidence that new pricing arrangements and a renewed focus on profitability from a new CFO will bring it back toward historical midcycle levels in 2022 and 2023. The shares leaped on positive guidance, and we think Corning is fairly valued.

Corning is a materials science behemoth with differentiated glass products for televisions, notebooks, mobile devices, wearables, optical fiber, cars, and pharmaceutical packaging. In its 170 years of operation, the company has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends that it can serve through its core competency of materials science. Most recently, we point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G build-outs as evidence of the pivot toward growth.

We’re maintaining our $40 fair value estimate for narrow-moat Corning after the company reported third-quarter results that were in line with management guidance. Corning’s strong pace of revenue growth continues, but its profitability is still dampened by rising input and logistics costs. We maintain our expectations for robust top-line growth to continue behind secular tailwinds toward 5G and connectivity, as well as growing dollar content in end applications. With shares down more than 5% after the release, we believe the market is skeptical about Corning’s ability to grow the bottom line in pace with revenue. We think current inflationary pressure on margins will be short term and that Corning’s profitability will improve as it leverages its centralized cost advantage and uses its sticky customer relationships to pass on pricing increases. We view shares as undervalued and think the current price presents an increasingly attractive opportunity to invest in a diversified, excellent operator with long-term growth potential.

Corning is a global leader in materials science, specializing in the manufacture of glass substrates for televisions, notebooks, mobile devices, and wearables, optical fiber for broadband networks and data centers, ceramics substrates and filters for catalytic converters, and pharmaceutical glass. In the firm’s 170 years of operation, it has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends it can serve through its core competency of materials science. Most recently, we’d point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the firm pivoting toward growth.

Narrow-moat Corning reported second-quarter results at the top ends of its guidance ranges, and we’re bumping up our fair value estimate to $40 per share from $38, as we expect the firm to continue benefiting from robust demand and tight supply for the rest of 2021. Long term, we think Corning’s engineering and manufacturing prowess and centralized cost advantage will allow the firm to maintain leadership positions in its diverse end markets and sustain profitable growth. Shares dropped modestly after the release, but we think this is the result of a broader market sell-off rather than a company-specific reaction. At our new valuation, we view shares as fairly valued and think a further sell-off could make Corning an attractive buying opportunity for investors looking to play into trends of connectivity and efficiency.

Corning beat the top end of its guidance ranges on both the top and bottom lines in its first quarter and guided to a strong second quarter. We’re raising our fair value estimate to $38 per share from $35, as we include stronger 2021 sales into our forecast. Corning’s outperformance in the quarter was broad-based, reflecting its ability to leverage centralized investments across a wide variety of end markets, a key tenet of our narrow economic moat rating for the firm. Despite our rosier outlook for 2021, we recommend waiting for a greater margin of safety before investing.

Corning is a global leader in materials science, specializing in the manufacture of glass substrates for televisions, notebooks, mobile devices, and wearables, optical fiber for broadband networks and data centers, ceramics substrates and filters for catalytic converters, and pharmaceutical glass. In the firm’s 170 years of operation, it has constantly innovated (including inventing glass optical fiber and ceramic substrates for catalytic converters) and oriented itself toward evolving demand trends it can serve through its core competency of materials science. Most recently, we’d point to Corning’s domination of the smartphone cover glass market and deals with U.S. network carriers to supply fiber for 5G buildouts as evidence of the firm pivoting toward growth.