“While Corning (GLW) shares have rallied, we believe that a ‘stronger for longer’ consumer trend augurs well for underlying demand drivers in Corning’s business segments exposed to consumer electronics, with further tightening in the glass supply demand environment due to outages at a major competitor,” wrote Citigroup analyst Jim Suva in a note to clients last week.
There’s a shortage of the high-tech glass used in video displays, mobile phones, and cars. One reason is a power outage that damaged manufacturing equipment at a Japanese factory of Corning rival Nippon Electric Glass.
But another reason is a pick up in demand for consumer electronics products. At an investor conference on November 30, Corning raised its projections for sequential sales growth in the fourth quarter to 5% to 8%. Corning also said it expects operating margin growth to double the sequential growth of the top line. Company executives cited strong performance across its end markets, on both the top and bottom lines, as a basis for the guidance update.
Other pluses noted in Suva’s report were growth in demand for auto glass and increasing demand for its Valor speciality glass used in vaccine storage.
Shares of Corning are up 26.52% for 2020 to date as of the close on December 21, and are up 15.12% in the last three months.
Corning is a member of my long-term 50 Stocks Portfolio. The shares are up 300.1% since I initiated that position on December 30, 2008.