Corning: Strong Demand and Strong Upside Potential

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I’m bullish on Corning.

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Strong Demand Across all Business Segments

Deutsche analyst Matthew Niknam gave Corning a Buy rating and a price target of $45.00, indicating an upside of 21.9%. He sees strong demand across all of Corning’s products used in TV and smartphone screens, broadband, and environmental, 5G, and hybrid/electric vehicles.

In August, for instance, Corning introduced mmWave indoor small-cell systems designed to help network operators bring reliable 5G connection indoors with small-cell radio nodes that are easy to install and cost-effective to operate.

“As more people return to offices, college campuses, hotels, and other highly concentrated environments, Corning’s mmWave indoor small-cell systems are critical to meeting the growing demand for reliable 5G connectivity,” said Marc Bolick, vice president and wireless business leader, Corning Optical Communications. “Corning is working side by side with our customers to help them capture and realize the opportunities of 5G.”

In September, the company expanded its collaboration with longtime client AT&T (NYSE:T) to expand investments in fiber infrastructure, expand U.S. broadband networks, and accelerate 5G deployment.

“We see expansion of our fiber infrastructure as central to the growth of our broadband reach, for consumers as well as business customers,” said Mo Katibeh, senior vice president, AT&T Network Infrastructure & Build. “By extending our collaboration with Corning, we’ll create American jobs through manufacturing investments, and also through the economic benefits that broadband brings to our communities.”

In short, Corning is in the right business at the right time.

Investors’ Take

Investors have been lukewarm on Corning. In the last twelve months, the company’s shares have gained a meager 6.6%, well below the 58% average of the industry, and are trading at a trailing PE of 36.1.

The TipRanks system is on the same page. It assigns Corning a Smart Score of 6, citing decreased Hedge Fund activity, Insider selling, poor technicals, and negative Investor sentiment.

The Analysts’ Take

Corning has a small following on Wall Street. Only five analysts followed its shares in the last three months, rating them a Moderate Buy, with an average price target of $43.75. The high forecast is $45.00 and the low forecast is $42.00. The average Corning price target represents an 18.50% change from the last price of $36.92.

An Enduring Company

Corning is an enduring company with 170 years of history, surviving multiple depressions and recessions to deliver scores of innovative products that changed peoples’ lives, from the glass for Edison’s lamp, to traditional TV tubes, to heat-resistant glass for kitchenware, to the fiber-optic cables that power the Internet, to the glass for flat-panel TVs and smartphones, and to catalytic converters.

The bottom line: Corning seems like an excellent company to own, for the long run.

Disclosure: At the time of publication, Panos Mourdoukoutas owned shares of Corning.

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