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Corning Inc. (NYSE:GLW)

Sep 04 2008

Corning Inc. (NYSE:GLW)

 

Corning Inc (NYSE:GLW) continues to slide reaching a new 52 week low today after being downgraded by RBC Capital Corp and cutting their third quarter outlook yesterday. But the current price/earnings ratio is too low for a company with the earnings and revenue growth displayed.

 

Third Quarter Troubles

The company reduced their third quarter outlook citing weak LCD display demand although consumers continue to buy televisions containing their LCD glass. The company felt manufacturers are reducing inventory instead of making new television sets. The new company range for quarterly earnings is between 43 and 45 cents. Analysts have been expecting 50 cents a share from the specialty glass maker but reduced that number to 47 cents after the company’s announcement.

 

Looking very Cheap

The stock fell 2% today after a Wednesday decline of 12%. At a current price/earnings (P/E) ratio of 4.8 investors are anticipating continued demand trouble as the current estimates are for very strong growth of 32.6% year over year. With 13.5% revenue growth for the year, the current stock price of $16.68 looks very cheap.

 

The Trade

            You could wait for the stock to bottom out and make a move to the upside before buying a little for a longer term hold. If the earnings and revenue continue to be in the double-digit growth range and the P/E continues to be in the single-digit area, the stock will be a good buy.

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