Barclays: Corning Still A 'Top Pick'

In a report published Wednesday, Barclays analysts maintained an Overweight rating on Corning Incorporated (NYSE: GLW), with a price target of $26.In the report Barclays noted, "Despite the mild sell-off post earnings, we still like GLW as our top pick. Long-term growth prospects are as encouraging as they have been in recent quarters. The quarter and guidance were essentially in line with our expectations so we would attribute the underperformance to the unchanged, though still positive, commentary on the glass market."Investors may have been hoping for upside to volume expectations or pricing declines. The company reported growth in total LCD glass volumes at a high-teen percentage y/y and moderate price declines. Volume may rise marginally in 2Q15 with lower price declines than witnessed in 1Q15. "Inventory is at the high end of what GLW considers healthy, we still expect Display to continue to perform well through 2015. GG4 volumes were impressive and helped offset declines in optics in Specialty Materials. Continued growth in GG4 will add significant revenues and GM accretion," the analysts said.Other parts of the business have been performing well, with segment sales and gross margins improving y/y four out of five segments. The EPS estimate for 2016 has been reduced from $1.83 to $1.74 to reflect a slightly lower revenue estimate. There is "potential upside from GG4, Phire, Willow, Iris and other new products" that may contribute to "2016 and beyond," the report added.