Shares of Corning Incorporated (GLW - Analyst Report) have been steadily moving higher over the last 12 months. The company’s stock provided a return of 43.1% compared with the S&P 500’s return of 11.1% over the same period.
The upside can be primarily attributed to seasonal strength in the Optical Communications segment in the last reported quarter. Additionally, new and pipeline products along with management’s recently announced capital allocation plans are the other positives that helped the stock to climb to greater heights.
Meanwhile, the company announced that it will showcase its latest Gorilla Glass for automotive curved display applications at the Paris Motor Show this year.
Benefits of Using Gorilla Glass in Automotive
Improved Vehicle Performance: In its bid to improve vehicle performance and achieve lower emissions, Corning is collaborating with auto industry majors. Notably, in Apr 2016, Corning along with Ford Motor Co. (F - Analyst Report) conducted a joint study showcasing the advantages of using Gorilla Glass in automotive windshield applications.
The lighter and tougher alternatives that Corning offers for sunroofs and windows of a car can substantially lower its overall weight leading to better fuel efficiency.
In Sync with Emission Regulations: Compared to the traditional soda-lime glass, Corning’s Gorilla Glass for the automotive industry is 25% thinner and 30% lighter. This helps to meet emission regulations better.
Style Quotient: Corning Glass ramps up the look of a car through aesthetic improvements such as a glistening dashboard and other accessories.
To drive growth, Corning is successfully leveraging the automotive market to disrupt the 6 billion square-foot auto glazing market. In this regard, the company announced in Dec 2015 that Ford will use its Gorilla Glass in the iconic Ford GT. This is the foremost production vehicle to employ Gorilla Glass for glazing applications like the windshield, rear engine cover and acoustic separator.
More recently, Corning announced a joint venture (‘’JV’’) with Saint-Goban Sekurit to develop, manufacture and sell lightweight automotive glazing solutions. Per this JV, the company will continue to produce and market Gorilla Glass and other glazers, retaining 100% ownership of the glass business. This venture will allow the company to move forward in the value chain beyond glass to manufacture and sell glazing solutions with a leading producer. This also provides a low-cost path for Corning to scale up the sales of Gorilla Glass glazing solutions worldwide.
Zacks Rank & Key Picks
At present, Corning carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology space are eGain Corporation (EGAN - Snapshot Report) and Acacia Communications, Inc. (ACIA - Snapshot Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, estimates for eGain for the current fiscal year have narrowed down from a loss of 25 cents to a loss of 21 cents.
On the other hand, estimates for Acacia for 2016 and 2017 have been revised upward to $2.15 from $1.87 and $2.40 from $2.35, respectively recently.
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