Truist Securities moved Corning Incorporated from Hold to Buy, noting that the company's shares fell by about 45% in July and that the decline creates what the brokerage views as an attractive buying opportunity. At the same time, Truist reduced its 12-month price target for the stock to $175 from $205, attributing the cut to higher discount rates and a compression in sector valuation multiples.
The upgrade reflects Truist's confidence that sustained investment in AI data centers, growing demand for optical networking equipment and an expansion in operating margins will support strong earnings growth in the coming years. The firm projects roughly 30% annual EPS growth between 2026 and 2029 as these factors gain traction.
Truist expects Corning's Optical and Solar segments to drive an 18% revenue compound annual growth rate through 2028. The brokerage emphasizes that long-term agreements with hyperscale customers should give the company greater earnings visibility as demand from large cloud providers supports order flow.
Optical products remain central to Truist's thesis. The brokerage notes the Optical business accounts for about 45% of Corning's revenue and continues to benefit from both AI infrastructure build-outs in data centers and fiber-to-the-home deployments. Truist also pointed to Corning's new Photonics market access platform as a potential long-term catalyst for growth, while forecasting operating margin expansion to 26% by 2028 and 28% by 2030.
Following Corning's second-quarter results, Truist raised its EPS estimates, now forecasting $3.34 for 2026, $4.32 for 2027 and $5.74 for 2028. Those upward revisions reflect expectations for stronger margins. The brokerage also raised its capital expenditure assumptions to account for a need to support growing AI-related demand.
Analytical takeaway - Truist's upgrade is grounded in a view that AI-driven data center spending and continued fiber investment will sustain demand for Corning's optical products and that contractual arrangements with large cloud customers will help smooth revenue and earnings visibility. The brokerage balances those bullish drivers against a lower valuation environment and higher discount rates by trimming its price target.
Market context - The investment case centers on data center infrastructure and telecom network investment, with implications for optical networking suppliers and companies exposed to hyperscale cloud build-outs. Corning's Solar business is also expected to contribute to midterm revenue growth.