Corning Incorporated
Thesis
Corning is undervalued due to market misperceptions about its core earning assets and growth potential in optical fiber and Gorilla Glass. With a projected earnings power of $2.27 per diluted share for 2019, Corning should trade at a multiple of 17x, leading to a target price of $38.50, representing a 51.4% total return over two years. The company is committed to returning excess cash through share repurchases and dividend increases, which will force the market to reevaluate its valuation.
Did it work?
The thesis that Corning was undervalued has played out significantly, with the stock price increasing by 420.6% since the pitch. The projected earnings power and target price were exceeded, and the company's commitment to returning excess cash through share repurchases and dividends likely contributed to the positive market reevaluation. Overall, the investment thesis was validated by the substantial price appreciation over the elapsed time.
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