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Corning (NYSE:GLW) is up 5.4% alongside an upgrade to Buy at Goldman Sachs, seeing the company riding multiple 2022 tailwinds as well as some declining risk in the Display business.
"We expect Display risk to recede while Optical, Environmental and Hemlock tailwinds continue and strengthen," the firm says. "We also see resumption of the buyback as a sign of management confidence in fundamentals."
Usually, weak TV demand means excess glass inventory that has to be worked down after the holidays, but the company pulled off an unexpected beat in Display thanks to tight supply/demand and solid execution, Goldman says.
Meanwhile, fundamentals should continue to be driven by strong Optical demand "gated only by Corning's ability to deliver product," as well as a rebounding Environmental business on abating auto-supply issues, and production restarts in the Hemlock business amid some solid solar demand.
Corning its trade well below its recent peak price/earnings ratio and it's "a key value stock to own in 2022 in our coverage," Goldman says.
It's raised its price target to $50 from $38, now implying 21% upside.
The company beat on top and bottom lines and guided to significant growth in the Optical business.