Analysts rethink key Apple supplier stock price target

TheStreet

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While investors are interested in Apple’s software, like Apple Intelligence, its hardware supplier quietly becomes a buy among analysts.

On Sept. 19, Corning (GLW) revealed major updates to its “Springboard” plan, which was released earlier this year and aims to boost annual sales by more than $3 billion in the next three years.

The company provided a new operating-margin target of 20% by the end of 2026.

Corning specializes in glass and ceramics. Founded in 1851, it is now known for being Apple’s iPhone display screen supplier. Its Gorilla glass was used in the first iPhone released in 2007, according to the biography “Steve Jobs” by Walter Isaacson. Other clients include Samsung, Alphabet’s Google, and LG.

“I’m very pleased with the progress we have made,” said Corning’s chief executive, Wendell Weeks. “We are implementing price increases in display technologies and expect to deliver segment net income of $900 million to $950 million in 2025, and to maintain net income margin of 25%.”

In April, Weeks said that price increases could help boost Corning’s profitability “despite sequentially lower sales, which were impacted by recession-level demand in several key markets and overall weakness in China.”

The specialty materials segment, which includes Gorilla glass, makes up only 14% of revenue.

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Corning sees weak Q3 sales

Corning’s business goes beyond making small screens. Its biggest segment is optical communications, which focuses on making the fiber optic cables and equipment essential for data centers.

Other segments include specialty materials, environmental technologies and life sciences. It also owns 80% of Hemlock Semiconductor, which makes hyperpure polysilicon, the raw material of chips.

Corning’s latest second-quarter financial report shows that optical communications generated $1.1 billion in revenue, a 4% increase driven by AI-related connectivity solutions. This accounted for 30% of the company’s total revenue.

The specialty materials segment, which includes Gorilla glass, makes up 14% of revenue. The latest quarterly revenue was $501 million, up 18% year over year, driven by “continued strong demand for premium glass for mobile devices and semiconductor-related products.”

For the quarter ended June 30, Corning earned 47 cents a share, topping the Wall Street consensus estimate by 1 cent. It reported core sales of $3.6 billion, topping analysts’ expectations of $3.55 billion.

It projected core sales of $3.7 billion for the September quarter, slightly below analysts’ estimate of $3.75 billion. The shares were down 7% on July 30 following the earnings.

The company maintained its projections for Q3 in the Sept. 19 announcement.

Analysts set higher price targets on Corning stock

Corning also hosted an investor meeting at its optical fiber facility in North Carolina on Sept. 19. At least four analysts updated their stock price targets on GLW after the event.

B of A raised its price target on Corning to $51 from $46 and affirmed a buy rating.

After touring the Concord facility, which is “Corning’s largest and lowest cost fiber manufacturing facility,” the analyst was “impressed with the technological intensity and manufacturing skill in such a well-managed place,” according to thefly.com.

The firm also mentioned Corning’s updated Springboard plan, highlighting that Corning expects operating margins to reach 20% by the end of 2026, compared with the 19.5% consensus.

Oppenheimer analyst Martin Yang also raised the investment firm’s price target to $51 from $47 and maintained an outperform rating. The analyst says the updated operating margin target of 20% by the end of 2026 offers clearer visibility for 2025 and improves the long-term margin outlook.

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JP Morgan analyst Samik Chatterjee keeps an overweight rating on Corning and forecasts a bullish valuation of more than $55 for the shares.

“The Concord tour underscored Corning’s ability to take pricing in display as well as the continued strong momentum in optical,” the analyst tells investors in a research note.

Chatterjee estimates the non-risk-adjusted plan indicates earnings per share near $3, and the $55 target highlights a strong upside opportunity for investors.

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