Corning is predicted to launch its third quarter 2021 outcomes on Tuesday, October 26. We count on Corning to possible publish income and earnings broadly in step with avenue expectations. Revenues are anticipated to have a tendency to extend as a consequence of continued demand for gasoline particulate filters, in addition to fiber optics to assist the enlargement of 5G for main carriers. The corporate has been capable of enhance its margins in current quarters. Whereas provide chain disruptions and inflationary pressures can influence total margin development, the corporate is more likely to move elevated prices on to its clients. Moreover, our forecast signifies that Corning’s valuation is round $ 49 per share, or 29% above the present market worth of $ 38. Our interactive dashboard evaluation on Corning Pre-Earnings has further particulars.
(1) Income anticipated largely in step with consensus estimates
Trefis estimates Corning’s third-quarter 2021 income to be round $ 3.6 billion, in line with the consensus estimate. Corning is predicted to see a restoration in demand for fiber optics as carriers broaden their 5G protection. For instance, Verizon
2) EPS more likely to be in step with consensus estimates
Corning’s third quarter 2021 earnings per share is predicted to be $ 0.59 per Trefis evaluation, broadly in step with the consensus estimate of $ 0.58. Corning’s adjusted web revenue of $ 459 million within the second quarter of 2021 displays a rise of greater than twice from its determine of $ 218 million within the earlier yr quarter. This may be attributed to larger revenues, a 200 foundation level enchancment in gross margins and a 120 foundation level development in working margin. Margins ought to enhance sooner or later, because of a nonetheless strong pricing setting. Whereas inflation has impacted uncooked materials prices for a number of firms, Corning will possible have the ability to move the extra prices on to clients, given the outlook for sturdy demand. So, for the total yr 2021, we count on Adjusted EPS to be above $ 2.16 in comparison with $ 1.38 in 2020.
(3) Estimate of the share worth 29% above the present market worth
By way of our Corning Evaluation, with an estimate of Adjusted EPS of round $ 2.16 and a P / E a number of of round 23x in 2021, that interprets to a worth of $ 49, which is 29% above the present market worth. On the present worth of $ 38, GLW is buying and selling at lower than 18 instances its anticipated EPS of $ 2.16 in 2021, down from 26 instances the degrees seen in 2020 and round 17 instances earlier than 2020. We imagine the a number of will possible rise for Corning. , given the outlook for sturdy demand. , margin enlargement and share buybacks – all pointing to stronger earnings development going ahead.
Be aware: P / E multiples are primarily based on the inventory worth on the finish of the yr and reported (or anticipated) income for the whole yr
Whereas GLW inventory might rise within the quick time period, 2020 has created many worth discontinuities which will present some thrilling buying and selling alternatives. For instance, you may be stunned at how counterintuitive inventory valuation is to Canadian Pacific Railway c. DR Horton
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