However, the increase in GLW stock has been far from consistent. Returns for the stock were 6% in 2021, -12% in 2022, and -1% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 - indicating that GLW underperformed the S&P in 2021 and 2023.
Below are key drivers of Corning's divisions that present opportunities for upside or downside to the current Trefis price estimate for Corning:
If, however, Corning's display technology revenues were to cross $12 billion due to potential manufacturing cost advantage in a period of declining prices, better uptake of its display panels, and solid growth from a newer generation of glass, it could lead to a potential upside of 10% to our price estimate.
The company's three smaller segments have all been growing faster than the underlying industries on account of a myriad of reasons:
- Environmental Technologies' growth was driven by the adoption of Corning's proprietary gasoline particulate filter (GPF) innovation.
- Specialty Materials growth is being led by the adoption of industry-leading cover glass innovation.
- Life Sciences business is benefiting from a strengthening market on account of newer applications, especially in growth categories like cell culture and gene therapy.
Corning is a global technology company that manufactures and processes a variety of products at approximately 119 plants in 15 countries. It makes money primarily through its joint ventures, Samsung Corning and Dow Corning. Samsung Corning manufactures glass substrates for displays which are primarily used in notebook computers, flat-panel desktop monitors, and televisions. Dow Corning manufactures silicone products. Corning's other business segments include environmental technologies, life sciences, and telecommunications.
Glass manufacturing is a commoditized business where prices are determined solely by factors of supply and demand. Innovations in display glass technology and manufacturing overcapacity have put downward pressure on prices. However, the pricing environment has improved lately.
Notebook, tablet PC, and television penetration remain low in most emerging markets and developing nations. We expect this demand to increase and drive the growth in global glass shipments.
Consumers prefer larger displays on their TVs, notebooks, tablets, and mobile phones because of the enhanced viewing pleasure. This may drive an increase in demand for television glass and thereby increase shipments. The demand for large-screen televisions is also likely to be driven by new technologies such as Ultra HD, 4K, and 8K, which provide enhanced viewing pleasure on large screen sizes.
The replacement rate for tablets, notebook PCs, and televisions remains high in developed markets. This is expected to create demand for new panels and hence increase the total number of shipments.
Corning believes it has sustained its competitive advantages in glass substrate products by investing in new technologies. This is likely to continue and could keep costs high.
To ensure compliance with emission standards, automobile manufacturers resort to the use of emission control systems. As these standards get even stricter, automobile manufacturers have to upgrade to newer and more effective emission control systems in order to remain compliant. This has a positive impact on the automotive exhaust systems market, which includes manufacturers of automotive substrates and filters, such as Corning.
