Corning Incorporated

Corning faced the impact of a series of pandemic-driven effects during the last quarter but the company managed to deliver an all-around beat. The management has worked hard to grow advanced strategic initiatives and sales while addressing the implication the current environment poses for cash generation and margins. The purchase of laptops, tablets, smartphones, televisions, and cars was below the company’s estimation in the last quarter. Weak consumer demand was offset by the strength of the company’s position in the rising solar and optical communications market and the ongoing outperformance by its businesses. Growth in cash flow and profitability have lagged behind Corning’s sales growth with the company operating with quite unpredictable and persistent inflation added to the raw material cost, the cost to ship and produce the products, and also the inventory it maintains. In Solar, Corning continues capturing significant upside tied to the progress in the renewable energy industry. We provide the stock of Corning with a ‘Hold’ rating and a revision in the target price.