Bernstein downgrades Apple supplier Corning on valuation
Bernstein lowered its rating on Corning to market perform from outperform, saying the glass and specialty materials maker is fully valued after a significant increase in its share price. The company's Gorilla glass product is used in Apple iPhone displays. Corning shares are up 43 percent in the last 12 months through Tuesday. "Corning has structural advantages from its manufacturing processes, operational efficiencies, economies of scale, and pricing premiums as a result of its technology and quality edge. Corning enjoys consistently higher margins and steady cash flows relative to peers which we believe can be sustained," Bernstein analyst Alberto Moel wrote in a note to clients Wednesday. "However, current multiples and our DCF-based valuation are aligned, with no strong catalysts to either the upside or downside." Corning last month reported fourth quarter financial results that beat Wall Street estimates on better-than-expected Gorilla Glass 5 sales, according to the analyst. Apple reported much better-than-expected earnings on Tuesday. Moel raised his Corning price target to $26 from $24, representing 2 percent downside from Tuesday's close. The company is trading at an 8.4 times enterprise value to forward EBITDA multiple versus the display glass industry average of 6.6 times, according to the analyst. "To be clear, we are still 'bullish' on Corning as a company — it remains an innovation machine with long-term upside … but it is not clear to us that this structural upside will be realized in the next 12 months, hence our valuation-driven downgrade," Moel wrote. — CNBC's Michael Bloom contributed to this story.

Wendell Weeks, chief executive officer of Corning Inc. Scott Eells | Bloomberg | Getty Images