Corning:Earnings Confirm the AI Thesis but the Valuation No Longer Does
Summary
I am downgrading Corning from STRONG BUY to a SELL. The business is executing, but the stock still prices in too much of the 2028 to 2030 opportunity, leaving about 24% downside to my base target. Corning delivered Q2 core sales of $4.738Bn and core EPS of $0.78, above consensus of $4.63Bn and $0.755. Core operating margin expanded to 20.9%.
The central AI thesis strengthened. Optical Communications sales grew 32%, enterprise sales grew 65%, and Gen AI product sales nearly doubled. However, Glass Innovations grew only 1%, and neither scale-up nor photonics is yet contributing to reported results.
My base model forecasts $22.7Bn of 2027 core sales and $4.20 of core EPS. Applying 27x to that EPS and discounting the December 2027 value at 9% produces a present target of $102.
December 12th, we will be bringing together investors and long-term thinkers at Fairmont Mt. Kenya Safari Club, Nanyuki for the Annual Henriot Capital Investor’s Summit. A full day of research, markets, meaningful conversations and shared experiences, built around one idea: long-term wealth conversations for future generations. Request an invitation below.
