On Thursday, HSBC analyst Stephen Bersey upgraded shares of Corning (NYSE:GLW), a leading technology company specializing in specialty glass and ceramics with a market capitalization of $40.49 billion, from Hold to Buy, while also lifting the price target to $60.00, up from the previous target of $51.00. According to InvestingPro data, four analysts have recently revised their earnings estimates upward, with price targets ranging from $43 to $65. The upgrade comes as a response to the strong demand for Corning's optical products, particularly from enterprise customers seeking artificial intelligence (AI) solutions.
The analyst highlighted the company's optical business, which continues to benefit from robust AI-related demand. The company's strong market position is reflected in its impressive 53.94% stock price return over the past year, according to InvestingPro data. Additionally, there are signs of a demand recovery in the carrier business within the same segment, supporting the company's $12.61 billion in trailing twelve-month revenue. In the display segment, Corning is expected to maintain stable performance, bolstered by price increases in the second half of 2024 and effective hedging against the Japanese yen for 2025 at a rate that is weaker than 2024's but still considered attractive.
Bersey pointed to the clear growth drivers and Corning's strong first quarter guidance for 2025 as key reasons for the more optimistic outlook. The upcoming investor meeting is also seen as a potential occasion for further upgrades to previous targets. The new price target of $60.00 is based on a target price-to-earnings (PE) ratio of 24 times, which is an increase from the prior PE ratio of 23 times. Notably, the stock currently trades at a PE ratio of 88.33x, and InvestingPro's Fair Value analysis suggests the stock is slightly overvalued at current levels. The company maintains a steady 2.25% dividend yield, having consistently paid dividends for 18 consecutive years. This target PE ratio is applied to the revised non-GAAP earnings per share (EPS) forecast for the next 12 months, which has been increased to $2.50 from $2.20.
The analyst's revised price target implies a 17.1% upside from Corning's current trading price. With increased clarity around the key growth drivers in Corning's end markets, the company's stock has been given a vote of confidence by HSBC, signaling a positive outlook for investors and the company alike.
In other recent news, Corning Inc . reported strong fourth-quarter results, surpassing expectations with revenues of $3.87 billion and earnings per share (EPS) of $0.57. BofA Securities analyst Wamsi Mohan raised the price target for Corning shares to $65 and maintained a Buy rating, highlighting growth opportunities in the company's Optical business and potential in the solar industry. Meanwhile, Barclays (LON:BARC) adjusted Corning's stock price target to $52 from $53, maintaining an Equalweight rating, following the company's financial performance, notably bolstered by its Optical Communications segment. Citi reiterated a Buy rating on Corning shares, maintaining a $58.00 price target, based on the company's performance, particularly in the Optical segment. These are recent developments concerning Corning Inc., which reported full-year 2024 sales of $13.1 billion, a gross margin of 32.6%, and operating margin of 8.7%. The company also provided guidance for first-quarter revenue and EPS at the mid-point of $3.6 billion and $0.50 respectively, demonstrating its ability to navigate changing currency rates while maintaining price increases.
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