Investing.com -- Truist Securities upgraded Corning Incorporated to Buy from Hold, saying the stock’s roughly 45% pullback in July presents an attractive entry point, while lowering its 12-month price target to $175 from $205 to reflect higher discount rates and lower sector valuation multiples.

The brokerage said the upgrade is driven by confidence that sustained AI data center investment, rising demand for optical networking products and expanding operating margins will fuel about 30% annual EPS growth between 2026 and 2029. It expects Corning’s Optical and Solar businesses to underpin an 18% revenue CAGR through 2028, with long-term agreements with hyperscale customers providing greater earnings visibility.

Truist said Corning’s Optical segment, which accounts for about 45% of revenue, continues to benefit from AI infrastructure and fiber-to-the-home spending. It also highlighted the company’s new Photonics market access platform as a potential long-term growth catalyst while forecasting operating margins to expand to 26% by 2028 and 28% by 2030.

Following the company’s second-quarter results, Truist raised its EPS forecasts to $3.34 for 2026, $4.32 for 2027 and $5.74 for 2028, citing stronger margins, although it also increased capital expenditure assumptions to support expanding AI-related demand.

The brokerage said risks to its outlook include a slowdown in AI-related capital spending by hyperscale customers, continued weakness in consumer electronics and automotive end markets, and inflationary pressures that could weigh on profitability.