Apple Supplier Gets Vote of Confidence for Sapphire Glass
24/7 Wall St., By Paul Ausick
GT Advanced Technologies Inc. (GTAT) shares got a boost on Tuesday after price target hike from $13 to $15 from analysts at Canaccord Genuity. The raise is due to Canaccord’s confidence that Apple Inc. (AAPL) plans to use the company’s sapphire glass in the next iPhone.
Apple has already agreed to provide $578 million in financing for a facility to be built in Arizona by Apple. GT will own and operate the required furnaces and related equipment to produce sapphire glass for Apple. A report earlier this month said that GT had already taken delivery of 518 furnace systems at the new plant. That’s enough equipment to make up to 116 million 5-inch iPhone displays.
There was also a report that Apple would use the sapphire glass only in its rumored iWatch. That report knocked GT’s share price down 5%.
Sapphire glass is more expensive than the Gorilla Glass Apple uses in its current smartphones. Gorilla Glass is made by Corning Inc. (GLW) and the conflicting reports have pushed Corning’s share price around, to a new 52-week high of $19.20 last Friday after sinking to around $17 earlier in February.
When GT and Apple announced the new plant last November, demand for sapphire glass was expected to rise by 50% by 2016, and GT expected the contract with Apple to have a positive impact on earnings starting this year. GT, long a supplier to the crystalline solar makers, has suffered a sharp downturn in its business since the price of solar modules collapsed.
GT’s shares have posted a new 52-week high of $12.72 on Tuesday morning. The 52-week low is $2.61 and the stock posted an all-time high above $16 in July of 2011.
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