Short Report on Corning Stock

Corning logged a -2.6% change during today's afternoon session, and is now trading at a price of $30.18 per share.

Over the last year, Corning logged a 4.0% change, with its stock price reaching a high of $37.1 and a low of $28.98. Over the same period, the stock underperformed the S&P 500 index by -14.0%. As of April 2023, the company's 50-day average price was $32.49. Corning Incorporated engages in the display technologies, optical communications, environmental technologies, specialty materials, and life sciences businesses worldwide. Based in Corning, NY, the large-cap Industrials company has 57,500 full time employees. Corning has offered a 3.6% dividend yield over the last 12 months.

The Business Has Weak Operating Margins:

2018-02-15 2019-02-12 2020-02-18 2021-02-12 2022-02-14 2023-02-13
Revenue (MM) $10,116 $11,290 $11,503 $11,303 $14,082 $14,189
Gross Margins 40.0% 40.0% 35.0% 31.0% 36.0% 32.0%
Operating Margins 16% 14% 11% 5% 15% 10%
Net Margins -5.0% 9.0% 8.0% 5.0% 14.0% 9.0%
Net Income (MM) -$497 $1,066 $960 $512 $1,906 $1,316
Net Interest Expense (MM) -$110 -$153 -$200 -$261 -$289 -$277
Depreciation & Amort. (MM) -$1,158 -$1,293 -$1,503 -$1,520 -$1,481 -$1,452
Earnings Per Share -$0.56 $1.13 $0.96 $0.66 $2.21 $1.56
EPS Growth n/a 301.79% -15.04% -31.25% 234.85% -29.41%
Diluted Shares (MM) 895 941 899 772 864 844
Free Cash Flow (MM) $3,808 $5,210 $3,931 $3,520 $5,032 $4,219
Capital Expenditures (MM) -$1,804 -$2,291 -$1,900 -$1,340 -$1,620 -$1,604
Net Current Assets (MM) -$2,897 -$6,585 -$8,438 -$9,323 -$9,950 -$9,771
Long Term Debt (MM) $4,749 $5,994 $7,729 $7,816 $6,989 $6,687
Net Debt / EBITDA 0.29 1.27 1.89 2.61 1.36 1.81

Corning has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and just enough current assets to cover current liabilities. We also note that the company benefits from a strong EPS growth trend and healthy leverage. However, the firm suffers from slimmer gross margins than its peers and weak operating margins with a negative growth trend.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Corning has a trailing twelve month P/E ratio of 43.9, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of $2.33, the company has a forward P/E ratio of 13.9. Corning's PEG ratio is 4.57 on the basis of the 9.6% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. In contrast, the market is likely undervaluing Corning in terms of its equity because its P/B ratio is 2.17 while the sector average is 3.78. The company's shares are currently trading 33.6% above their Graham number.

Corning Has an Average Rating of Buy:

The 10 analysts following Corning have set target prices ranging from $33.0 to $43.0 per share, for an average of $38.1 with a buy rating. As of April 2023, the company is trading -14.7% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

Corning has a very low short interest because 0.9% of the company's shares are sold short. Institutions own 70.2% of the company's shares, and the insider ownership rate stands at 0.33%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $2,965,520,922.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.