"Value investors would have a tough time buying the shares with these kind of multiples," said Fox, who has a neutral rating on the stock. "I'd say that the company will bounce around at its current levels over the next 12 months."
Fox said the stock could exceed his expectations if Corning meets the high side of its goals in glassmaking for flat-panel screens known as liquid crystal displays. Corning creates the refined glass used by Asian makers of flat-panel computer monitors and TV screens.
The company has said it expects annualized revenue growth of 20 percent to 40 percent from this business through 2006 as more consumers switch from bulky cathode ray tube monitors to the sleeker LCD screens. Corning is the leader in making LCD glass, with a market share of roughly 50 percent.
Corning pioneered glassmaking for conventional color TV screens, but it said recently that it was leaving this business in North America. The company, however, will continue its Korean joint venture with Samsung, which is focused on the Asian consumer market for conventional TV sets.
Gabriel Lowy, an analyst at Blaylock & Partners, said he did not think Corning could live up to its revenue projections for the LCD business, because of price competition. "I think that their revenue growth will be in the 15 to 20 percent range," said Lowy, who has a sell rating on the stock.
He is also skeptical about the company's projected growth rates in other businesses, including the making of ceramic materials for catalytic converters used to reduce automobile emissions. Many analysts worry that global economic weakness could cause a severe slowdown in auto production.
Still, it is clear that Corning is spreading its bets over several technologies rather than remaining largely tied only to telecommunications. "Despite the fact that Wall Street wanted us to be a pure-play company, that's never been our plan," said Houghton, during a recent telephone interview.
Don't even say the word "takeover" to Houghton, the great-great-grandson of the company's founder. He said that remaining independent was one of the company's core values. Analysts view a takeover as unlikely, noting that Corning has chosen not to sell when it was more vulnerable.
Though Houghton stepped down in 1996 after 13 years as chief executive, the board drafted him to return to the job in April last year after the company descended into unprofitability. Many analysts credit him with making tough decisions necessary for turning around the company.
A self-professed "failure at retirement," Houghton, 67, has not said when he plans to step down again. Analysts say that they expect the change to occur in the next two years and that the replacement is likely to be Wendell P. Weeks, 43, the president and chief operating officer.
"Jamie Houghton is a man of action," Lowy, the analyst, said. "He's there to fix his family's company and hand it over."
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