Citi says it has “greater conviction” in Corning ‘s margin recovery potential. Analyst Asiya Merchant upgraded the glass maker’s shares to buy from neutral. She also raised her price target to $40 from $36, implying shares rallying more than 20% from Wednesday’s close. “While demand in Corning’s end markets (consumer electronics, fiber upgrades) remains more tempered near term, we believe margin improvements will drive positive estimate revisions ahead. As markets recover, we expect these initiatives will drive significant operating income expansion ahead,” Merchant wrote in a Wednesday note. A 20% price increase in the company’s display segment offerings will help offset incremental costs and foreign exchange headwinds, helping the company’s margin expansion targets, the analyst said. Merchant noted near-term demand recovery in the optical market remains uncertain. However, improved productivity enhancements in its optical segment will also help offset a weaker demand outlook, she added. Meanwhile, the analyst is “very optimistic” on the company’s opportunity in the Auto glass market. Increased production opportunities for semiconductors is another potential driver for growth, she added. Shares are up 4% in 2023 and just 1.5% over the past 12 months. —CNBC’s Michael Bloom contributed to this report.
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