Corning up as Susquehanna upgrades, predicts lower Gorilla Glass costs

Corning's (GLW +2.8%) earnings power will be boosted by a multi-year TV replacement cycle and its multiples could benefit from glass industry consolidation caused by the poor balance sheets of rivals, thinks Susquehanna's Mehdi Hosseini, upgrading shares to Positive.

Hosseini also forecasts "material improvement in the cost and margin profile" for Gorilla Glass thanks to the Samsung deal and the shifting of some production from Japan to South Korea. That, in turn, will allow Gorilla Glass to maintain at least a 10x cost advantage relative to sapphire, which GT Advanced (GTAT -0.5%) is set to make large volumes of for Apple.

He also points out 45% of 2013 Gorilla Glass demand came from tablets, a market for which sapphire could remain cost-prohibitive for a while.

Global TV shipments fell in both 2012 and 2013, thanks to high penetration rates and a shift in consumer electronics spend towards smartphones/tablets. DisplaySearch has forecast modest growth for 2014.

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Comments (3)
  • Momintn
    , contributor
    Comments (6086) | Send Message
    Corning is a cheap stock with good fundamentals. This year people are looking for cheap companies to buy. However the mood of Wall Street is bearish on Corning. If the big money sells the stock on the price of glass, Corning will go down again. I'm hoping that shareholders like the increase of lcd market share the acquisition of the Samsung deal gives Corning as well as the growth in revenue in their other divisions although those divisions are quite small. I have a very small position in the stock and am undecided whether to sell before they report earnings, so more news on Corning is appreciated.
    26 Mar 2014, 11:16 AM Reply Like
  • Momintn
    , contributor
    Comments (6086) | Send Message
    Investors may be interested in reading Corning's website for what is going on. This news release in Feb is a quick informative read.
    26 Mar 2014, 12:23 PM Reply Like
  • Robert D.
    , contributor
    Comments (52) | Send Message
    Who cares about Corning, the real news is in sapphire at this point. Apple will just charge 10x more for their phones if that's what it takes!
    27 Mar 2014, 01:55 PM Reply Like
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