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Universal Display (PANL) +5.2% after Goldman sings the company's praises in the wake of...

Universal Display (PANL) +5.2% after Goldman sings the company's praises in the wake of Samsung's Galaxy S IV launch. The firm thinks PANL's revenue opportunity with the S IV, which (as expected) sports a 5" 1080p OLED display using green host materials, could be 3x-4x greater than its opportunity with the S III. It might also help that initial S IV reviews generally praise the phone's display, though not everything else about it.
Comments (5)
  • buccella@msn.com
    , contributor
    Comment (1) | Send Message
     
    Big spec change is the 25% more battery life which is directly tied to the use of green oled materials from PANL. Not sure how Apple will be able to match this spec change. The software changes, camera improvements and even the display itself can all be countered by Apple, but not sure how they can pull off the battery capacity improvement. To me - going back to the late 90's when I first started investing in Panl, this low power feature was always the holy grail of the technology. Now if they can get blue into the color line-up then all bets are off on how high this stock can run.
    15 Mar 2013, 09:31 AM Reply Like
  • Esekla
    , contributor
    Comments (2287) | Send Message
     
    Goldman must be pulling their usual shenanigans and profiting from volatility, rather than increase in this stock. Their analyst, Brian Lee, neglects to mention, as any competent, fair-minded analyst would, that Samsung is, for the first time, also using a competitor's green materials alongside UDC's. So the profit opportunity here is muted, especially since much of it is patent royalty, which is a flat fee, and does not increase with the use of green materials. This viewpoint is supported by UDC's own most recent earnings guidance, which was inline and surely included initial Galaxy S IV material sales.

     

    In my view, the situation is more of a negative than positive, as Samsung is acting like a frenemy, that could dump UDC at any time. Such a move would bring UDC close to zero value. They need to continue to innovate, and diversify the customer base in order to remain indispensable. As many other analysts have noted, risk outweighs potential rewards at current prices.
    15 Mar 2013, 10:23 AM Reply Like
  • Alex10652
    , contributor
    Comments (22) | Send Message
     
    Regardless of the situation, it is always prudent for a manufacturer to have more than one supplier for a critical component. There is no way Samsung will be "dumping" UDC.
    15 Mar 2013, 10:43 AM Reply Like
  • Esekla
    , contributor
    Comments (2287) | Send Message
     
    Alex,
    I agree, Samsung won't be dumping UDC in a matter of months, but the opportunity horizon here is years rather than months. Furthermore, the way Samsung completely fails to share information bi-directionally with UDC is not the behavior of a partner. Rather it is common cutthroat chaebol tactics that show they would love to eventually dump them, given the opportunity.
    15 Mar 2013, 11:27 AM Reply Like
  • ParaDiddle
    , contributor
    Comments (44) | Send Message
     
    Esekla, you are misinformed. Nippon is the middleman between Samsung and UDC for the green "host" material ("host" not "emitter"). The resultant formula that gets sold to Samsung is 80:20 UDC to Nippon host materials. Yes, this is not as good as 100% UDC host materials but UDC has never sold green host to Samsung in quantities yet. I don't know if that 80:20 mix is also applied to red host or not, but either way, UDC is still making great margins on emitters (red and green) and those are protected by their patents regardless of who manufactures and sells them to Sammy. The bottom line is that the more square meters of OLED produced means increased revenue and profits for UDC. Green coming online should account for an extra $15m in revenues in 2013 for UDC and YES, that is already factored into the 110-125m guidance given on the call.
    15 Mar 2013, 06:02 PM Reply Like
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