Corning Looking Good to Analysts as LCD Demand Outlook Improves
Glass substrate maker Corning Inc. (GLW) is looking increasingly appealing to analysts, with Goldman Sachs and Deutsche Bank both issuing upgrades today based on improved prospects for the LCD television market.
Back on Dec 8 Davenport & Co analyst F. Drake Johnstone cut his rating on Corning (GLW) to “Neutral” from “Buy” on a valuation basis. He worried that consumer demand for LCD televisions could wane in the first quarter after the holiday buying surge.
The next, day however, Corning announced continued strength in worldwide LCD television sales had led to an increase in the company’s fourth-quarter glass substrate volume expectations, and an improved outlook on 2010 glass market growth. Two days after that Jefferies &Co initiated coverage on Corning with a “Buy” rating. Analyst George Notter wrote that investors are underestimating the potential size of future LCD panel shipments. Ticonderoga analyst Brian White raised his rating on the stock to “Buy” from “Neutral. Both analysts set a price target of $22.50.
On Dec 22 Barclays Capital’s Christopher Muse wrote that he maintained our aggressive call to buy GLW shares as we continue to see potential upside to the $23 level by mid-2010.
Thomas Weisel’s Ajit Patel on Dec 23 raised his estimate for Corning on signs of strong-sell through of LCD panels and raised his price target to $19 from $17. Analysts at ThinkEquity Partners went further, upgrading Corning from “Hold” to “Buy” with a target of $35. On Jan 4 Citigroup , which has a “Buy rating on the stock, raised its target price to $24. The same day Oppenheimer & Co reiterated its “outperform” rating and raised the target price from $20 to $22. Oppenheimer’s Yair Reiner had lifted his rating to “outperform” and set a $19 price target in August. He said then that the shares had “flat lined” on “concern that Street estimates are not achievable” or that demand will plummet, but “our analysis suggests such anxieties are inflated.” UBS analyst Nikos Theodosopoulos in October upgraded Corning from “neutral” to “buy” with a target 0f $19.
Morgan Keegan on Jan 5 reiterated its “Outperform” rating on Corning and highlighted the stock as its Select Idea for 2010. “Investor concern over an LCD glass demand peak in Q4:09 leading to declines in 2010 is overdone, and we continue to highlight the compelling valuation, with a CY10E PE under 12x on our $1.70 EPS estimate, and fair value near $26 assuming an S&P-like mid-teens multiple.”
Standard & Poor’s on Jan 9 reiterated its “outperform” rating with a target of $21, “based on a multiple of 13X our 2010 EPS estimate, a slight discount to peers that we believe have stronger growth prospects.” Similarly, Zacks as of Jan 7 had an “outperfom” opinion on the stock with a target of $21.30.
Goldman Sachs analyst Simona Jankowski this morning upgraded Corning to “Buy” from “Hold,” with a new target of $23, up from $18, asserting that the LCD cycle likely bottomed in Goldman launched coverage of Corning in September with a Neutral rating and a $17 price target. And Deutsche Bank analyst Carter Shoop today upped his rating to “Buy” from “Hold,” lifting his price target to $24 from $19.
A transcript of Corning’s presentation to the Barclays Technology Conference last month is available here.
For latest analyst comment on Corning see Alacra Pulse.
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