BofA Downgrades Corning Inc.

Bank of America Merrill Lynch downgraded Corning Inc. GLW on Tuesday from Buy to Neutral and lowered the price target from $24 to $20.

Analysts led by Wamsi Mohan cited headwinds from “1) increased risk to TV unit growth, 2) reset of core earnings to a new Yen rate and risk to the unhedged exposure longer term and 3) limited benefit from Gorilla Glass in the near-term.”

The price target was based on “17x C15 FCF/share of $1.15 ($1.20 previously). 17x is in the middle of the historical range of 15-20x.”   

Mohan noted that “given the significant movement in earnings caused by the “core rate” and the loss of comparability with longer term historical trends, we are shifting our focus to free cash flow as the most relevant metric for determining” the price target.

Corning Inc. traded at $17.49 in the premarket, down 0.85 percent.