Universal Display (PANL) Slammed on Legal Update, KeyBanc Defends
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Price: $7.17 +1.99%
Rating Summary:
3 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 18 | New: 50
Rating Summary:
3 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 18 | New: 50
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Universal Display Corp. (Nasdaq: PANL) is getting slammed 9 percent Thursday after updating legal proceedings, saying the High Court in Japan invalidating the company's broadest claims in patents JP ‘929 and JP. The company will appeal this again to the Japanese Supreme Court.
Commenting on the news, analyst at KeyBanc said, "We view this news as a slight negative (headline risk only), as it has little to no impact to the Company’s financials. Consequently, we believe this morning’s sell-off is excess and view it as an attractive buying opportunity."
They said if the Supreme Court upholds this view, it may limit PANL from collecting royalty payments for products that are manufactured and sold in Japan in the future, or just 0-1% of the company's business today. They also said it will likely result in investors becoming more concerned about patent related risks in the future. Shares reacted negatively when this news first came out in March of last year.
The firm sees little actual impact to financials.
"Japan tends to have the most narrow construction, while the United States uses the broadest construction. As these patents have already been issued in the United States and there is no one challenging PANL in the United States, we believe PANL will remain able to effectively monetize its patents. Samsung signed a seven-year contract with PANL five months after this news originally came out in Japan (March 2011)."
Commenting on the news, analyst at KeyBanc said, "We view this news as a slight negative (headline risk only), as it has little to no impact to the Company’s financials. Consequently, we believe this morning’s sell-off is excess and view it as an attractive buying opportunity."
They said if the Supreme Court upholds this view, it may limit PANL from collecting royalty payments for products that are manufactured and sold in Japan in the future, or just 0-1% of the company's business today. They also said it will likely result in investors becoming more concerned about patent related risks in the future. Shares reacted negatively when this news first came out in March of last year.
The firm sees little actual impact to financials.
"Japan tends to have the most narrow construction, while the United States uses the broadest construction. As these patents have already been issued in the United States and there is no one challenging PANL in the United States, we believe PANL will remain able to effectively monetize its patents. Samsung signed a seven-year contract with PANL five months after this news originally came out in Japan (March 2011)."
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