Bank of America analyst Simon Woo has adjusted the price target for Universal Display (OLED, Financial), reducing it from $220 to $160. Despite this significant cut, the firm maintains a 'Buy' rating on the stock. The decision reflects concerns over potential impacts from U.S. tariffs and sluggish advancements in the commercialization of blue color materials, which are seen as factors affecting valuation.
Nonetheless, the firm maintains a positive outlook on Universal Display due to its robust margin profile and substantial net cash position. These financial strengths are deemed to support the company's long-term growth perspectives, justifying the continued recommendation to 'Buy' the shares despite the adjusted price target.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Universal Display Corp (OLED, Financial) is $172.44 with a high estimate of $213.00 and a low estimate of $130.00. The average target implies an upside of 45.55% from the current price of $118.48. More detailed estimate data can be found on the Universal Display Corp (OLED) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Universal Display Corp's (OLED, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Universal Display Corp (OLED, Financial) in one year is $175.47, suggesting a upside of 48.1% from the current price of $118.48. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Universal Display Corp (OLED) Summary page.
OLED Key Business Developments
Release Date: February 20, 2025
- Revenue: $648 million for 2024, a 12% year-over-year growth.
- Operating Income: $239 million for 2024, with operating margins of 37%.
- Net Income: $222 million for 2024, or $4.65 per diluted share.
- Material Sales: $365 million for 2024.
- Royalty and License Revenues: $267 million for 2024.
- Gross Margin: 77% for 2024, consistent with 2023.
- Operating Expenses: $260 million for 2024, up from $224 million in 2023.
- Cash and Investments: $928 million at year-end 2024.
- Fourth Quarter Revenue: $162 million, up 3% from Q4 2023.
- Fourth Quarter Net Income: $46 million, or $0.96 per diluted share.
- Dividend: Increased to $0.45 per share, payable on March 31, 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Universal Display Corp (OLED, Financial) reported record revenues of $648 million and net income of $222 million for 2024.
- The company strengthened its leadership position in the OLED ecosystem with new long-term agreements, including a significant partnership with VisionOx.
- Universal Display Corp (OLED) is making significant advancements in its R&D, particularly in the development of phosphorescent blue, which is expected to increase OLED display energy efficiency by up to 25%.
- The OLED market is expected to grow substantially over the next five years, with significant increases in OLED smartphone, IT, and automotive displays.
- The company announced an increase in its quarterly cash dividend, reflecting confidence in future growth and commitment to returning capital to shareholders.
Negative Points
- The commercialization of phosphorescent blue has been delayed, with expectations now set for months beyond 2024.
- Operating expenses increased to $260 million in 2024, up from $224 million in 2023, partly due to restructuring costs.
- Fourth quarter 2024 operating margins were negatively impacted by restructuring costs related to the OVJP California location closure.
- The 2025 revenue guidance of $640 million to $700 million reflects uncertainty in the consumer electronics market and macroeconomic factors.
- There is increased competition from local Chinese material suppliers in the OLED market, which could pose challenges to Universal Display Corp (OLED)'s market position.
