We’re raising our Corning price target after a shortsighted post-earnings decline

Shares of high-tech glass manufacturer Corning (GLW) experienced a 2.5% dip on Tuesday, a move that analysts interpret as profit-taking following an impressive year-to-date surge of over 80%. While some investors chose to exit positions after the company’s solid earnings report, CNBC’s analysts viewed the pullback as a strategic buying opportunity.

Corning, a key supplier of specialty glass for data center cables and displays in a wide range of digital devices, presents a compelling investment case due to its exposure to high-growth sectors. CNBC is raising its price target on GLW to $95 per share from $93, reiterating its buy-equivalent 1 rating on the stock.

Corning’s third-quarter results, ending September 30th, showcased strong performance metrics:

• Core Revenue: Rose 14% year-over-year to $4.27 billion, exceeding the LSEG consensus expectation of $4.23 billion. This core revenue figure adjusts for factors like currency fluctuations and discrete, non-recurring events, providing a clearer picture of underlying business performance.
• Core Earnings Per Share (EPS): Increased 24% to $0.67, narrowly surpassing the LSEG EPS estimate of $0.66.

The robust Q3 numbers, combined with promising growth prospects, solidified the conviction that the stock’s temporary decline offered a chance to bolster positions in Corning.

Several factors contribute to this positive outlook:

• Data Center Business: Corning’s fiber optics solutions are increasingly vital for the efficient operation of modern data centers. As companies continue to scale their data infrastructure, the demand for Corning’s high-performance optical cables is expected to rise considerably. This trend is further fueled by the increasing adoption of generative AI, which requires significant infrastructure upgrades. Analysts estimate a 30% compound annual growth rate (CAGR) in Corning’s data center sales between 2023 and 2027. Moreover, the enterprise side of their business, which focuses on data center sales, grew by an impressive 58% year-over-year in the third quarter.
• Partnership with Apple: The expanded partnership with Apple for iPhone and Apple Watch glass strengthens Corning’s position in the consumer electronics market. CEO Wendell Weeks emphasized the significance of a $2.5 billion deal with Apple to manufacture 100% of iPhone and Apple Watch glass in the U.S., marking a major win for domestic manufacturing and providing a longer-term growth vector.
• Springboard Initiative: Corning’s Springboard turnaround initiative, now in its second year, has already generated a 31% increase in sales. The program has also driven operating margins to an impressive 19.6%, a 330 basis point increase, which has translated into a 72% surge in earnings per share. The success of Springboard has led to upgraded financial targets. Management now expects to achieve the 20% operating margin target in Q4, a full year ahead of schedule and Corning has increased its internal incremental revenue target to $6 billion by the end of 2026.

Beyond these core areas, Corning is also strategically positioning itself for growth in the burgeoning solar energy market. The company’s existing expertise in semiconductor polysilicon manufacturing provides a unique advantage in this sector. Corning already sold out of polysilicon and wafer capacity in 2025 and has more than 80% of capacity for the next five years, already committed. They expect Solar sales will grow from about $200 million in the first quarter of this year, to a $2.5 billion revenue run rate business by the end of 2028.

Looking ahead, Corning’s management projects sales of $4.35 billion for the current quarter, exceeding the LSEG consensus estimate of $4.26 billion. Core earnings are anticipated to fall between $0.68 and $0.72 per share, also surpassing the LSEG consensus estimate of $0.67.

Corning is proactively adapting its technologies to meet the evolving demands of the AI-driven world. As Weeks articulated, the company is working to secure formal customer agreements related to U.S. hyperscale data center construction using U.S. supply chains. He also highlighted the opportunity to replace copper connections with fiber, which is expected to result in a significant growth opportunity. On the data center interconnect front, Weeks said the company is seeing a “tremendous response” to the introduction of its high density GenAI fiber and cable system, which “enables customers to fit anywhere from 2 to 4 times the amount of fiber into their existing conduit,” and expects this business to scale quickly and reach a $1 billion opportunity for the company by the end of the decade. Microsoft is already working with Corning to upgrade the performance and reliability of its Azure cloud and AI services.

While sales in the Display segment, which largely supplies glass for LCD televisions and monitors, decreased by 7.5% year-over-year, they outpaced expectations and experienced a 5% sequential increase. The company anticipates the segment’s net income to reach the high end of its $900 million to $950 million guidance range, with an income profit margin of at least 25% for the year. Corning’s Automotive group also saw increased earnings year-over-year.

In conclusion, Corning’s strong financial performance, its strategic positioning in high-growth markets, and its proactive investments in new technologies make it an attractive investment for long-term growth.