Wall Street Analysts See Upside in Chipmaker and Smartphone Glass Maker: Texas Instruments and Corning Get Upgrades
The market is buzzing with excitement this Wednesday as two major players, Texas Instruments and Corning, received upgrades from prominent analysts. Citigroup raised its rating on Texas Instruments (TXN) to “buy” from “neutral,” citing the company’s lowered capex spending and expectations of a rebound in operating margins. Meanwhile, Mizuho upgraded Corning (GLW) to “outperform,” seeing the recent stock pullback as a buying opportunity driven by market rotation rather than a slowdown in the company’s business. Let’s dive into the details and explore why these upgrades are generating such buzz.
Key Takeaways:
- Texas Instruments: Citigroup believes the chipmaker is worth its premium price, with earnings per share growth potentially reaching 100% once margins rebound.
- Corning: Mizuho analysts see a strong growth program for the smartphone glass maker, with their “outperform” rating and a price target implying significant upside.
- Market Rotation: The pullback in Corning’s stock seems to be driven by broader market trends, not company-specific factors.
- Positive Catalysts: Both companies are expected to see positive catalysts in the coming months. Texas Instruments’ lower capex spending signals a focus on profitability, while Corning’s September 19 meeting could highlight the strength of its growth program.
Texas Instruments: Is it “Christmas in August?”
Citigroup analyst Christopher Danely believes the recent news regarding Texas Instruments is a “Christmas in August” moment, marking a shift in the company’s strategy. Danely highlights that TI has lowered its 2026 capital expenditure (capex) spending from $5 billion to between $2 billion and $5 billion. This indicates that the company is prioritizing profitability and margin improvement over aggressive growth.
Danely believes that operating margins are currently at their lowest level in a decade and are “unsustainably low.” He expects margins to rebound and drive earnings per share (EPS) growth. This optimism is fueled by the fact that TI has historically traded at a premium of 20% to 30% compared to its competitors, which suggests investor confidence in the company’s long-term potential. Even though the stock is currently considered expensive, Danely believes the potential for margin recovery and higher EPS growth makes it a worthwhile investment.
Shares of Texas Instruments are up 18.8% year-to-date (YTD). The Citigroup upgrade and the positive outlook for margin expansion have fueled investor enthusiasm and are likely to contribute to further gains in the future.
Corning: A Buying Opportunity After Recent Pullback
Mizuho Securities analyst John Roberts sees the recent pullback in Corning’s stock price as a “buying opportunity.” He believes the decline was more driven by market rotation than any underlying weakness in the company’s business. Roberts points to Corning’s strong growth program, which includes investments in its core product lines such as Gorilla Glass, used in smartphones and other devices, as well as its optical glass fiber business.
Roberts emphasizes that there are “no overall slowdowns in the company’s business and growth programs.” He anticipates that the September 19 meeting, which could provide further insights into the company’s strategy and growth, will serve as a positive catalyst.
Despite the recent 8.1% drop in Corning’s stock price over the past month, the stock remains nearly 34% higher year-to-date.
Corning’s Growth Program
Corning’s growth program is based on multiple key drivers:
- Gorilla Glass: While competition in the smartphone glass market is increasing, Corning continues to innovate and maintain a strong market position. The company is also expanding its applications for Gorilla Glass into new areas like automotive and wearables.
- Optical Fiber: Corning’s optical fiber business is experiencing significant growth driven by global investment in fiber optic infrastructure, which is used for high-speed internet and data connectivity.
- Display Glass: Corning is a major supplier of glass used in LCD and OLED displays. The increasing demand for larger screens and higher resolution displays is expected to drive continued growth in this market.
Potential Catalysts for Corning
- September 19 Meeting: Information shared at this meeting could provide further evidence of Corning’s strong growth program.
- Continued Investment in Growth Areas: Corning is expected to continue investing in areas such as Gorilla Glass, optical fiber, and display glass, which will fuel future growth.
- Expanding Application of Gorilla Glass: Corning is exploring new applications for Gorilla Glass, which could lead to significant growth opportunities.
The Implications for Investors
These analyst upgrades and positive outlooks for Texas Instruments and Corning highlight the potential for further gains in the semiconductor and glass manufacturing sectors. While both companies have their own unique strengths and challenges, they are both poised to benefit from long-term growth trends in their respective industries.
For investors looking for exposure to these sectors, these upgrades provide a compelling opportunity to consider adding Texas Instruments and Corning to their portfolios. However, it’s important to conduct thorough research and consider your own investment goals and risk tolerance before making any investment decisions.