Corning stock plunges 46% in July as Wall Street turns bullish

Corning shares fell 46% in July, their worst monthly drop in 24 years, after third-quarter guidance missed Wall Street estimates.

"We have waited for a more reasonable entry point to get more constructive, and we now have one after a roughly 45% pullback in July," Truist analysts said in upgrading the specialty glass maker to Buy from Hold.

Truist lowered its price target to $175 from $205, implying about 27% upside from Friday's close. The firm said customer spending in Corning's optical communications business remains firm despite broader market concerns, and pointed to the newly introduced Photonics MAP as an incremental growth driver that could support the business through the end of the decade.

UBS analyst Joshua Spector also stayed constructive, reiterating a Buy rating while cutting his target to $196 from $228. He said the selloff appears overdone, with only modest estimate revisions reflecting a more conservative outlook for fiber capacity expansion and the timing of the photonics business.

Morgan Stanley struck a more cautious tone, trimming its target to $165 from $180 with an Equal Weight rating. The firm said second-quarter results largely played out as expected, with sold-out conditions limiting room for further upside, and noted that a significant portion of Corning's products sells under long-term agreements, leaving limited scope for additional pricing gains.

Corning reported second-quarter earnings of 78 cents a share on revenue of $4.74 billion, beating estimates of 75 cents on $4.63 billion. For the third quarter, it forecast earnings of 85 to 89 cents a share on revenue of $4.9 billion to $5 billion, with the revenue midpoint of $4.95 billion missing the $5 billion consensus.

The stock ended lower in 16 of 22 trading sessions in July, with double-digit declines on three days. Corning shares remain up 58% year to date and 119% over the past 12 months, outpacing the S&P 500's 18% gain over that stretch.

The divergent analyst calls give investors a clear split on valuation after the steep pullback. Investors will watch Corning's third-quarter earnings report, expected in late October, to see whether optical demand holds through the AI infrastructure buildout.

This article is for informational purposes only and does not constitute investment advice.