Susquehanna Starts Universal Display (OLED) at Positive

February 15, 2017 12:19 AM EST
Get Alerts OLED Hot Sheet
Price: $145.53 -0.41%

Rating Summary:
    12 Buy, 6 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 25 | Down: 19 | New: 35
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Susquehanna initiates coverage on Universal Display (NASDAQ: OLED) with a Positive rating and a price target of $100.00.

Analyst Mehdi Hosseini commented, "We believe secular OLED adoption in the smartphone (SP) and TV markets is set to accelerate, while UDC's robust patent portfolio and minimal competition reduces any potential risks to licensing streams. The recent announcement that UDC is doubling manufacturing capacity is a leading indicator of UDC's growth prospects."

The analyst highlighted the following key drivers:

  • UDC is a "pure-play" provider of the material used to make OLED display technology, which we believe has reached an inflection point. UDC's business model is attractively positioned in the adoption of OLED technology, given its "direct materials sales" and "Royalty & licensing" approach.
  • OLED penetration in the SP and TV markets is set to accelerate. We anticipate penetration in the SP market to increase from the current ~16% to ~30% in 2019, with penetration into the TV market increasing from <1% to ~3% by 2019.
  • Flexible OLED Display adoption is the next "big catalyst" in consumer electronics. We believe widespread commercialization of foldable tablets and/or smartphones with flexible displays are likely to occur by the turn of the decade, positioning UDC as a key enabler (and beneficiary) though revenue contribution from such opportunities are not yet dialed into our estimates.
  • Potential risks exist from Samsung licensing and some UDC patent expiration, but likelihood of negative outcome is low as UDC is a key OLED IP provider while Samsung will soon start supplying OLED panels to Apple, which is adopting the technology for the first time.

For an analyst ratings summary and ratings history on Universal Display click here. For more ratings news on Universal Display click here.

Shares of Universal Display closed at $67.15 yesterday.



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