Shares of Corning (GLW) are up 4% after the glassmaker announced a $2.5 billion investment from Apple (AAPL) to produce cover glass for iPhones and other mobile devices at its Kentucky plant.
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In an announcement made at the White House alongside U.S. President Donald Trump, Apple CEO Tim Cook said that, going forward, Corning will make all of the cover glass for iPhones and Apple watches. It is the first time that 100% of the cover glass on these Apple products will be made in the U.S.
Following the Oval Office announcement, Corning said that it plans to dedicate its entire plant in Kentucky to manufacturing glass for Apple devices, and that it will expand its manufacturing and engineering workforce at the plant by 50%. Apple and Corning have worked together since the launch of the original iPhone back in 2007.
Made in America
News of the Corning investment was part of a bigger announcement by Apple that it will invest a total of $100 billion in the U.S. over the next four years. That larger investment includes a multiyear supply agreement with Coherent (COHR) to produce lasers for the iPhone’s facial recognition system, and an expansion of the company’s data centers in North Carolina, Iowa, Nevada, and Oregon.
While Apple’s $2.5 billion investment in Corning’s Kentucky plant is a positive development, it isn’t clear how much of an impact it will have on the company long-term. Protective cover glass for mobile devices comprises only 8% of Corning’s annual sales, and Apple products are a fraction of that amount, note analysts. GLW stock is up 38% this year.
Is GLW Stock a Buy?
The stock of Corning has a consensus Strong Buy rating among 13 Wall Street analysts. That rating is based on 10 Buy and three Hold recommendations issued in the last three months. The average GLW price target of $66.83 implies 3.04% upside from current levels.
