Credit Suisse Cuts Corning Estimates But Remains Positive on Stock

Credit Suisse’s Michael Walker today trimmed his price target for Corning (GLW) to $24 from $28, and cut his 2007 EPS estimate to $1.19 a share from $1.25. Walker says the cuts reflect issues in the company’s Display business, including excess panel inventories, a more muted outlook for desktop monitor demand and the potential that “continuing Gen8 fab pushouts could slow GLW’s ability to reduce costs, pressuring margins.”

Walker asserts that recent commentary that panel makers are constraining production “appears to have been hollow talk.” He notes that while panel makers are cutting cap ex budgets, “ongoing production increases in existing fabs continues to generate excess supply. The result will likely be soft glass volumes and pricing GLW in Q1-2.”

Nonetheless, he remains positive on the stock, with an Overweight rating. Writes Walker:

“The stock’s valuation appears to bake in even deeper estimate cuts, and we remain positive at these levels.”

Corning shares today are up 51 cents at $19.93.

GLW 1-yr chart