Corning: Poised To Benefit From 5G, But Consider The Risks

Aug. 22, 2020 7:25 AM ETCorning Incorporated (GLW)23 Comments


  • Corning Incorporated is a leading global company that specializes in glass and ceramics science, and optical physics.
  • Stay-at-home trends and the 5G upgrade cycle will benefit the company's optical communications segment.
  • I also outline the risks and provide a price target at which I find the shares to be attractive.

When someone thinks about technology companies, the FAANG stocks most often come to mind. But it's easy to overlook companies such as Corning Incorporated (NYSE:GLW), which produces products that serve as the communications backbone through which much of the world's data travel. Today, I evaluate what makes Corning an attractive company and the price level at which I believe the shares make an attractive buy, so let's get started!

(Source: Company website)

A Look Into Corning

Corning Incorporated is a leading global company that specializes in glass and ceramics science, and optical physics. Its products have a wide range of uses, with applications in the technology, industrial, consumer, and scientific sectors. The company was founded 169 years ago and has 50,000 employees worldwide. Corning has a strong track record of innovative products, including its Gorilla Glass, which is used to protect smartphone and tablet screens. Its innovative products are also essential to the Life Sciences segment for ongoing research and development. This innovation is supported by its 10 global R&D centers across North America, Europe, and Asia.

What I like about Corning is its leadership position in optical communications, which serves as the backbone for telecommunications around the world. This is supported by the 12% quarter-over-quarter growth in sales in this segment. I'm also encouraged by the company's recent announcement that it's working with Qualcomm (QCOM) to deliver indoor networks that are 5G ready, affordable, and easy to install. I see big growth opportunities stemming from this partnership, with broad applications across the office, education, healthcare, and retail sectors.

Corning's business has also been helped by the recent surge in demand due to increased work- and stay-at-home practices, as noted in the latest conference call (emphasis added by author):

"Bandwidth demand has accelerated during the pandemic consuming network headroom capacity. Evidence

This article was written by

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I'm a U.S. based financial writer with an MBA in Finance. I have over 14 years of investment experience, and generally focus on stocks that are more defensive in nature, with a medium to long-term horizon. My goal is to share useful and insightful knowledge and analysis with readers.  Contributing author for Hoya Capital Income Builder. 

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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