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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Baa1[N]/BBB+[N]
- Corning's EUR 31s have underperformed MTD, reversing outperformance seen in July, with spreads near YTD wides in August. The bond now sits wide of the BBB- corporate curve.
- Q2 pre-announced (08 July) core sales beat guidance/consensus while EPS was at the upper end. Full results (30 July) aligned with forecasts, but Q3 guidance was soft. Q2 core sales +4%, op income +2.3% with margins at recent highs, H1 FCF USD 291mn (vs. USD -73mn H123).
- Rating positions remain weak: S&P sees leverage at 3.4x (2.8x excl. one-offs) vs. a 2x downside threshold; Moody's noted a 4x leverage peak in Q1, falling to 3x by 2025 against a downside threshold of no improvement to <3x. S&P are also looking for FOCF of 20% from 12% for a stable outlook.
- Recent yen appreciation could boost performance. Reported Q2 revenue was flat YoY due to USDJPY rally as negative FX revenue adjustments increased and CF adjustments for gains on hedges fell while hedges were renewed at less favourable rates. Planned price increases to protect margins may also be less necessary now. JPY colour; https://roar-assets-auto.rbl.ms/files/65544/BOJ%20Review%20-%20Jul%202024.pdf, https://marketnews.com/goldman-sachs-on-yen.
- Resumption of buybacks seems to be funded from FCF and shouldn’t hurt leverage, but this implies improvement hinges on improved op performance. Investor days in September and 2025 may reveal a longer-term distribution plan.
- Focus increases on the ‘Springboard’ strategy, targeting an annualised sales increase of USD 3bn (risk-adjusted) or USD 5bn (non-risk-adjusted) by 2026 vs. BBG consensus of USD +2.8bn.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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