Corning Earnings: Market Now Appears to Match Our Recovery Optimism; Shares Are Fairly Valued

We maintain our $35 fair value estimate for shares of narrow-moat Corning after its fourth-quarter results and first-quarter guidance came in line with our expectations. Corning’s results continue to weaken amid slow customer spending caused by soft consumer demand and data center inventory digestion. After a double-digit sales decline in 2023, however, we expect a return to growth in 2024. The largest driver of our recovery thesis is a return to optical fiber spending from data center customers and service providers, but we expect the recovery to be broad-based overall. Corning is now guiding to sequential growth in 2024 after the first quarter, which we think is why shares shot up 8% following the release. We see shares as fairly valued.