Corning Stock Is a Solid Tech Stock With a Compelling Valuation

Corning Incorporated Develops Next-Generation Technology

Stock investors have been running to the exits recently, dumping whatever shares they own with little regard for the stocks’ fundamentals or other positives. With the selling capitulation, we’ve seen the S&P 500 decline to levels not seen since December 2020—and there could be more drops to come.

While the possibility of a pending recession is realistic, the world isn’t crashing. For long-term investors with a time horizon of more than five years, there are numerous opportunities to accumulate shares of solid companies with excellent fundamentals.

I’m not talking about start-ups or young companies that are vulnerable to a slowing economy and high interest rates. I’m talking about established companies like Corning Incorporated (NYSE:GLW) that have proven themselves over a period of decades.

If you own any electronic device that has a display screen, there’s a good chance it was developed by Corning Incorporated. That’s huge in my mind, and it implies that the company has staying power during both good and bad economic times.

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GLW stock is currently attractively priced. Corning trades at 12 times its consensus 2023 earnings-per-share (EPS) estimate and only 1.6 times its consensus 2023 revenue estimate. (Source: “Corning Incorporated (GLW),” Yahoo! Finance, last accessed June 21, 2022.)

Even if you include the company’s debt of $7.1 billion, its ratio of enterprise value to revenue is a bargain at 2.3 times. Moreover, Corning stock has a price/earnings-to-growth (PEG) ratio of only 1.2, which is compelling for a technology stock.

And did I mention that Corning Incorporated pays quarterly dividends of $0.27 per share, for a forward dividend yield of 3.4%?

Decade-Long Uptrend in Place for GLW Stock

Despite Corning Incorporated’s solid fundamentals, Corning stock finds itself down by 16% this year and down by 28% from its 52-week high of $43.47.

A look at the long-term chart below shows GLW stock mounting and entering a nice long-term uptrend from its low of March 2009 to its recent highs.

Corning stock tested trendline support in 2012 and 2020 and managed to hold. In each of these situations, GLW stock staged a strong rally.

Chart courtesy of StockCharts.com

Shares of Corning Incorporated have fallen below their multiyear support/resistance level of $35.00 and could retest $25.00, which would present an opportunity.

As long as Corning stock’s trendline around $22.50 holds, the uptrend would be intact.

Flipping to Corning Incorporated’s two-year stock chart, you can see GLW stock breaking down in June 2021 before mounting another attempt at $42.00 in February 2022.

Chart courtesy of StockCharts.com

Watch for Corning stock to test $30.00. A break below that level could drive GLW stock toward $25.00, which I view as an opportunity.

On the upside, the immediate target for shares of Corning Incorporated is the 50-day moving average of $34.57 and the multiyear resistance at $35.00. Above those levels is the 200-day moving average of $36.86, followed by trendline resistance around $38.00.

A sustained breakout could drive Corning stock toward the range of $40.00 to $44.00.

Analyst Take

As I said earlier, opportunities to pick up shares of solid companies like Corning Incorporated at a discount don’t occur that often.

When it does happen, as we’re seeing now with GLW stock, it makes sense to consider investing in shares on price weakness.