Corning Could Be A Long-Term 'Home Run' In Barclays' Eyes

• Corning Incorporated GLW shares have been steadily declining since April, and are down 28 percent from the March 30 high of $23.24.
• Barclays’ Joseph Wolf maintained an Overweight rating on the company, while reducing the price target from $26 to $25.
• China’s macroeconomic condition is expected to make Corning’s near-term operating environment challenging, Wolf mentioned.

Analyst Joseph Wolf said that a recent visit to Corning’s headquarters reaffirmed the company’s long-term growth prospects, but highlighted that its near-term operating environment is difficult due to China’s macroeconomic situation.

The company’s management highlighted the devaluation of the RMB and its impact on the EPS in 3Q and slightly lower panel maker utilizations as the concern areas.

Corning’s long-term growth prospects remain intact with its Optical and Gorilla Glass doing well and the mature Display business continuing to generate adequate cash to fund future investments, dividends and buybacks, the Barclays report stated.

Wolf believes that the company’s robust cash generation will be adequate to fund growth opportunities, while rewarding shareholders. “Investors should appreciate knowing that while they wait out the next big growth leg for GLW, they'll be rewarded with a good dividend and buyback,” the analysts wrote.

The EPS estimate for 2016 has been reduced from $1.73 to $1.65 to reflect lower revenues for Display, Specialty Materials and Environmental.