LCD Televisions – Davenport & Co.’s Drake Johnstone this morning raised his rating on Corning (GLW) shares to Buy from Neutral, and set a $21 price target, writing that the company’s glass sales could rise on double-digit growth in global LCD television units.
In the U.S., LCD sales were up a mere 2% for the year to date through September, and rose just 4% in October, acknowledges Johnstone, though Black Friday sales last week were a boost to sales in the States: “It appears that LCD televisions were flying off the shelves of U.S. retailers, as consumers responded to attractive deals such as Best Buy’s offer of a Sharp 40″ LCD television for $199.”
But the real story is elsewhere: China’s LCD television market may grow 15% this year to 44 million units, and Latin America and “emerging Asia Pacific countries” may collectively see a 42% increase this year, writes Jonstone.
Corning expects global LCD TV sales to see a 13% rise for this full year to 206 million units, and could be up another 227 million units next year, according to research firm DisplaySearch.
It’s possible, writes Johnstone, that panel makers are going to increase their production even as global inventory of glass panel makers has declined to 14 weeks from 17 weeks last quarter, which would imply supply may have to catch up with demand for glass at some point. And glass panel prices have “stopped declining” this month and may remain flat in Q1 before rising in Q2, he thinks.
Corning shares today are up 95 cents, or 7%, at $14.90.