BofA lifts Corning stock target to $65, maintains Buy rating

On Wednesday, BofA Securities analyst Wamsi Mohan increased the price target for Corning shares (NYSE:GLW) to $65 from the previous target of $56, while reiterating a Buy rating on the stock. The adjustment follows Corning’s release of its fourth-quarter results, which exceeded expectations. The company reported revenues of $3.87 billion, surpassing the guidance figure of $3.75 billion. Earnings per share (EPS) reached the high end of the guided range at $0.57, aligning with BofA’s estimates and slightly above the consensus estimate of $0.56. With a market capitalization of $42.8 billion, Corning has demonstrated strong momentum, delivering a remarkable 69% return over the past year. According to InvestingPro analysis, the stock is currently trading slightly above its Fair Value.

For the fourth quarter, Corning’s gross margin expanded by 170 basis points year-over-year to 38.6%. Looking ahead, management has provided guidance for first-quarter revenue and EPS at the mid-point of $3.6 billion and $0.50 respectively, compared to pre-announcement consensus estimates of $3.5 billion and $0.48. InvestingPro data reveals that 4 analysts have recently revised their earnings expectations upward, while the company has maintained dividend payments for 18 consecutive years, demonstrating consistent shareholder returns.

Mohan’s recent note highlighted multiple unique growth opportunities for Corning, including the cyclical recovery in its Optical (Carrier) business, the ramp-up of the Lumen/BEAD programs, the potential in the solar industry, and sustained profitability in the Display segment. Despite an anticipated quarter-over-quarter decline in the Optical business for the first quarter of 2025, the analyst sees various compelling growth drivers for Corning in both the short and long term that do not rely on General AI advancements.

The endorsement of the Buy rating by BofA Securities is based on the expectation that Corning will be able to increase its revenues faster than its end markets, thanks to an increase in content across its product lines.

In other recent news, Corning Inc reported a successful fourth quarter with earnings surpassing analyst expectations. The manufacturer of specialty glass and ceramics posted an adjusted earnings per share (EPS) of $0.57, exceeding the analyst estimate of $0.56. However, revenue was reported at $3.5 billion, slightly shy of the consensus of $3.75 billion. Despite this, Corning’s core sales, excluding certain items, reached a record $3.9 billion, marking an 18% year-over-year increase.

Corning also demonstrated improved profitability, with its core operating margin expanding by 220 basis points year-over-year to 18.5%. Looking ahead, the company provided an optimistic outlook for the first quarter of 2024, expecting core sales to grow approximately 10% year-over-year to $3.6 billion. Core EPS is projected to increase by about 30% to a range of $0.48 to $0.52.

For the full year 2024, Corning reported GAAP sales of $13.1 billion, with a gross margin of 32.6% and operating margin of 8.7%. The company’s GAAP EPS for the year was $0.58, with operating cash flow reaching $1.9 billion. These are the recent developments concerning Corning Inc.

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