Last Update 02 Nov 25
Fair value Increased 19%Corning's analyst price target has risen significantly from $77.75 to $92.75, as analysts cite stronger profit margins, improving revenue growth, and optimism about expanding opportunities in key business segments.
Analyst Commentary
Analyst sentiment around Corning has grown increasingly positive, with several firms raising their price targets and citing both recent execution and promising future growth drivers. Despite the upbeat tone, some mixed notes remain regarding near-term operational challenges and industry trends.
Bullish Takeaways- Bullish analysts point to Corning’s recent revenue and profit beats, especially within Display and Specialty Materials, as signs of strong execution and competitive positioning.
- The accelerating adoption of fiber and connectivity solutions, driven by artificial intelligence applications and data center buildouts, is expected to provide a sustained, structural growth catalyst for Corning’s Optical segment.
- Incremental revenue contributions from Polysilicon and ongoing expansion in the Fiber business are anticipated to help extend Corning’s growth trajectory well into the next several years.
- Analysts foresee structurally higher earnings growth rates with higher margin expansion as demand for advanced materials and networking solutions continues to rise.
- Some cautious analysts note that recent quarterly outperformance was skewed toward Display and Specialty Materials, with Optical lagging, raising questions on the breadth of growth across segments.
- Supply chain constraints and uncertainty in certain end markets could weigh on near-term revenue and execution, potentially disrupting the pace of margin expansion.
- External factors, such as changes in energy pricing and the U.S. petrochemical landscape, could present risks to Corning’s input costs and near-term profitability.
What's in the News
- Apple and Corning announced a major expansion of their partnership. Apple has committed $2.5 billion to produce all iPhone and Apple Watch cover glass in Corning's Harrodsburg, Kentucky facility, which will create the world's largest glass production line for smartphones and increase local employment by 50% (Apple/Corning announcement).
- Corning and All Weather Group unveiled an exclusive collaboration to bring thin quadruple-pane window units featuring Corning Enlighten Glass to Canada. This initiative aims to set new standards for window thermal performance and energy efficiency (All Weather Group/Corning announcement).
- Corning provided earnings guidance for Q4 2025, expecting core sales of around $4.35 billion and core EPS growth outpacing sales in the range of $0.68 to $0.72 (Company guidance).
- QuantumScape and Corning entered a joint development agreement to manufacture ceramic separators for solid-state batteries, combining Corning’s materials science with QuantumScape’s battery technology (QuantumScape/Corning agreement).
- Corning partnered with GlobalFoundries to develop detachable fiber connector solutions for silicon photonics, targeting high-performance and energy-efficient data center applications (GlobalFoundries/Corning collaboration).
Valuation Changes
- Consensus Analyst Price Target has increased from $77.75 to $92.75, reflecting greater optimism in Corning's future outlook.
- Discount Rate has edged up slightly from 8.54% to 8.57%, indicating only a marginal shift in perceived risk.
- Revenue Growth expectations have risen modestly, moving from 13.77% to 13.83%.
- Net Profit Margin is projected to improve significantly from 12.65% to 14.79%.
- Future P/E ratio has fallen considerably from 32.2x to 24.8x, suggesting higher earnings expectations relative to share price.
Key Takeaways
- Strong demand in Optical and Solar sectors, along with U.S. manufacturing, boosts sales, margins, and aligns with energy policies for revenue growth.
- Share buybacks and innovations in data centers reflect confidence in cash flow and support earnings per share growth.
- Corning's strategic reliance on secular trends for growth, exposure to trade tensions, and competitive market pressures may challenge profitability and financial transparency.
Catalysts
About Corning- Engages in the optical communications, display technologies, environmental technologies, specialty materials, and life sciences businesses in the United States and internationally.
- Corning's Springboard plan aims to add more than $4 billion in annualized sales by 2026, driven by strong demand in Optical Communications and Solar sectors due to powerful secular trends, positively impacting revenue growth.
- The company sees substantial growth in Optical Communications, particularly in innovations for Gen AI data centers, which are expected to drive incremental revenue and accelerate operating margin improvements toward 20% by the end of 2026.
- Corning's significant U.S. manufacturing footprint provides a competitive edge and is expected to attract commercial agreements, enhancing sales and net margins despite tariff implications.
- In the Solar market, Corning plans to commercialize new U.S.-made products with committed customer capacity through 2025, aligning with government policies on energy independence, leading to higher revenue and earnings.
- The continued aggressive share buybacks reflect confidence in future cash flow generation and are expected to support earnings per share growth over the Springboard time frame.
Corning Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Corning's revenue will grow by 13.4% annually over the next 3 years.
- Analysts assume that profit margins will increase from 5.8% today to 12.6% in 3 years time.
- Analysts expect earnings to reach $2.6 billion (and earnings per share of $2.98) by about September 2028, up from $819.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $3.1 billion in earnings, and the most bearish expecting $2.3 billion.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 29.3x on those 2028 earnings, down from 75.7x today. This future PE is greater than the current PE for the US Electronic industry at 23.9x.
- Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.53%, as per the Simply Wall St company report.
Corning Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Corning's reliance on non-GAAP core performance measures, as opposed to GAAP data, may obscure financial transparency, potentially leading to investor concerns regarding revenue and net margins.
- Exposure to tariffs, particularly from geopolitical tensions between the U.S. and China, although mitigated by Corning's local manufacturing strategy, still presents a potential risk that could affect net earnings.
- Corning's growth projections are highly reliant on secular trends like Gen AI and solar. Any slowdown or change in demand for these technologies could negatively impact revenue expectations and overall financial performance.
- The potential macroeconomic downturn, while adjusted for in Corning's risk analysis, still poses a threat as it could affect customer spending on big-ticket items like optical and automotive products, impacting revenue and net earnings.
- Increased competition in key markets such as Optical Communications and Solar, particularly from foreign manufacturers, could pressure pricing and margins, adversely affecting operating margins and overall profitability.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $69.833 for Corning based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $84.0, and the most bearish reporting a price target of just $47.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $20.7 billion, earnings will come to $2.6 billion, and it would be trading on a PE ratio of 29.3x, assuming you use a discount rate of 8.5%.
- Given the current share price of $72.39, the analyst price target of $69.83 is 3.7% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Read more narratives
US$50.34
FV
69.3% overvalued intrinsic discount11.78%
Revenue growth p.a.
0users have liked this narrative
0users have commented on this narrative
1users have followed this narrative
US$84
FV
1.4% overvalued intrinsic discount16.07%
Revenue growth p.a.
0users have liked this narrative
0users have commented on this narrative
6users have followed this narrative