Corning Stock (NYSE: GLW) is set to report its Q1 2024 results on April 30, with revenues expected to reach $3.1 billion and adjusted earnings of $0.35 per share, in line with consensus estimates. The company anticipates Q1 to be a slow quarter, with growth projected in the following quarters. While Q1 results are expected to be in line, the stock is considered to be appropriately priced. Trends that may drive Corning’s results include its stock performance in recent years, with a 15% decline from early 2021 to now compared to the S&P 500’s 30% increase over the same period.
Corning has underperformed the S&P 500 in recent years, with returns of 3% in 2021, -14% in 2022, and -5% in 2023, as opposed to the S&P 500’s returns of 27%, -19%, and 24% in the same years. Beating the S&P 500 consistently has been challenging for individual stocks in recent years, including heavyweight Information Technology sector stocks. However, the Trefis High Quality Portfolio, comprised of 30 stocks, has outperformed the S&P 500 each year over the same period, providing better returns with less risk.
In the face of an uncertain macroeconomic environment with high oil prices and elevated interest rates, there is speculation about whether Corning may underperform the S&P 500 over the next 12 months, as it did in 2021 and 2023. From a valuation perspective, Corning is deemed fully priced, with an estimated valuation of $32 per share based on a 17x P/E multiple for GLW and expected earnings of $1.89 per share for 2024. In the previous quarter, Corning’s revenue declined 10% year-over-year, with a 24% drop in optical communications sales. However, the company saw its adjusted operating margin expand by 230 bps year-over-year.
For the latest quarter, sales are anticipated to decline 7% year-over-year due to lower optical communication sales, but Corning is expected to benefit from higher panel maker utilization and pricing actions, as well as increased adoption of gasoline particulate filters. While Q1 is expected to be a subdued quarter for Corning, the stock may react to any revisions in guidance that are provided. Despite Corning stock being perceived as appropriately priced, it is beneficial to assess how the company’s peers are performing on relevant metrics, which can be found in Peer Comparisons.
