Analyst Note| William Kerwin |
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.