Apple (AAPL) is among the largest companies in the world, valued at a market cap of roughly $2.8 trillion. Over the years, it has launched several industry-leading consumer tech devices, such as the iPhone, MacBook, iPad, Apple Watch, and AirPods. In order to assemble and manufacture these devices, Apple needs to source a wide range of raw materials from multiple suppliers.

One key Apple supplier is Corning (GLW), a company valued at $29 billion by market cap. In the last decade, Corning stock has returned 112.6% to shareholders, after adjusting for dividends. Comparatively, the S&P 500 Index ($SPX) has returned 230% in the past decade. 

In 2024, GLW is beating the broader market, with the stock up 11.4% YTD while the S&P 500 has added 8.7%. Let’s see if gaining exposure to this tech stock makes sense at the current multiple.

An Overview of Corning Stock

Corning is a material sciences company with a 170-year track record of game-changing innovations. It has showcased expertise across verticals such as glass science, ceramic science, and optical physics, in addition to deep manufacturing and engineering capabilities that help Corning develop category-defining products. 

The company invests heavily in research and development, which has allowed it to introduce a wide range of innovative products over time. Corning serves markets such as optical communications, mobile consumer electronics, display, automotive, solar, life sciences, and semiconductors. 

How Did Corning Perform in Q1 of 2024?

Corning recently announced its results for Q1 of 2024, reporting revenue of $3.26 billion and adjusted earnings of $0.38 per share. Comparatively, Wall Street forecast Q2 sales at $3.12 billion and earnings at $0.36 per share. In the upcoming quarter, Corning estimates sales of $3.4 billion and earnings between $0.42 and $0.46 per share, in line with analysts' expectations. 

Management emphasized that it is on track to add more than $3 billion in annualized sales over the next three years, as it has secured the required capacity for expansion. Moreover, the company is optimistic that revenue growth will translate to earnings and cash flow going forward, which could support dividend hikes, too. 

Corning ended Q1 with an operating cash flow of $190 million and deployed $252 million towards capital expenditure, which suggests its free cash outflow stood at $62 million, narrower than its outflow of $383 million in the year-ago period. 

However, in the last 12 months, Corning reported a free cash flow of $809 million, allowing it to pay shareholders an annual dividend of $1.12 per share - which translates to a yield of more than 3%. Given its outstanding share count, Corning’s annual dividend amounts to $960 million, indicating a payout ratio of over 100%. 

In the last 10 years, Corning has raised dividends by 10.8% annually, significantly enhancing the yield-at-cost.

What's the Target Price for Corning Stock?

Out of the 10 analysts covering GLW stock, four recommend “strong buy,” one recommends “moderate buy,” and five recommend “hold,” for a consensus opinion of “moderate buy.”

The mean target price for GLW stock is $35.45, indicating expected upside potential of about 4.5%.  

Analysts tracking Corning expect its sales to rise by 2.2% to $13.8 billion and earnings to increase by 10% to $1.88 per share. So, priced at 18x forward earnings, GLW stock is quite cheap, given analysts expect the bottom line to expand by more than 11% annually in the next five years.