BofA says Corning is undervalued heading into earnings — here's Cramer's take

WTI crude jumped 5% to above $88 per barrel on escalating U.S.-Iran tensions, while the S&P 500 was roughly flat and the 10-year Treasury yield stayed steady. Corning rose nearly 1% after Bank of America lifted its price target to $186 from $155 ahead of earnings next Tuesday, and Morgan Stanley called Apple a tactical long into its April 30 earnings, citing better-than-feared gross margin and guidance dynamics. The club also trimmed Starbucks and added Johnson & Johnson, with rapid-fire coverage of QXO, Cleveland-Cliffs, and Okta.

Analysis

The market is telegraphing that energy shock risk is being treated as transitory unless it bleeds into rates. That matters because the immediate losers from higher oil are not the airlines or retailers in a first-pass read, but any segment where margin assumptions are already stretched and refinancing needs are elevated; a move in 10-year yields would be the real transmission channel into equity multiples. In that framework, financials are less a direct oil beneficiary than a relative winner if curve steepening is driven by growth-resilient inflation rather than credit stress.

Corning looks like the cleaner second-order winner than the headline implies. The thesis is not just incremental fiber demand; it is that AI/network capex is shifting from compute-led to interconnect-led spend, which tends to support a multi-quarter order cycle and improves pricing power for specialized optical components. The near-term risk is that capacity expansion pulls forward opex and working capital before revenue converts, so the stock can sell off on margin anxiety even as the medium-term demand curve improves.

Apple is being positioned as a low-expectation setup, but the more important issue is whether services and installed-base monetization can offset hardware volatility into the June guide. If management leans conservative, the stock can still work because the market is likely to re-rate any guidance stability as de-risking into WWDC and the next form-factor cycle. The contrarian point is that the foldable narrative may be less about near-term unit volume and more about preserving premium ASPs in a maturing phone market; if that optionality stays intact, downside is probably capped unless China demand deteriorates sharply.

Key Decisions for Investors

• Add to GLW on any post-earnings weakness; use a 1-3 month horizon. Risk/reward favors buying dips because AI interconnect demand can re-rate the multiple before margin expansion is visible.
• Initiate a tactical long AAPL into earnings with a defined-risk structure: buy stock or call spreads into the print, then trim into strength if June-quarter guidance confirms stability. Upside is driven by guidance and event-calendar optionality over the next 6-10 weeks.
• Hold or modestly add JNJ as a defensive ballast if geopolitical volatility persists. In a regime where oil shocks can pressure sentiment but not yet rates, quality healthcare should outlast cyclical de-rating.
• Avoid chasing SBUX until discretionary demand data stabilizes; if oil spills into consumer confidence, this is a lagging loser. Better expressed as a short-term relative short versus JNJ over the next 1-2 months.
• Use BAC/MS as a conditional long only if the 10-year yield starts rising without credit spreads widening; if yields are stable, the trade is muted, but a mild steepening regime could re-open NII upside over the next quarter.