Mid Or End Game For Universal Display?
Esekla • 26 Comments
Esekla • 26 Comments
Universal Display Is A Bet On The OLED Market
Alpha Gen Capital
Alpha Gen Capital
Wed, Jun. 29, 2:47 PM
- Universal Display (OLED +1.9%) is higher after agreeing to acquire BASF's (OTCQX:BASFY +2.3%) organic light emitting diode intellectual property assets for ~€87M.
- OLED says the assets include more than 500 issued and pending patents around the world, and are aimed at accelerating development of commercial blue phosphorescent emissive materials.
- Needham reiterates a Buy rating and $69 price target on OLED, saying that combined with last week's acquisition of a contract research firm specializing in advanced materials development, the moves are a good use of cash that could erect additional barriers against competitors as OLED displays gain broader adoption.
- Even as it reiterates a Hold rating, Gabelli notes that light blue and dark blue emitter materials are "the holy grail" of OLED emitter materials, and the company will continue to strive to be able to launch the first commercial light blue and dark blue emitter materials.
Fri, Jun. 17, 2:09 PM
- Japan's Nikkei reports Samsung (OTC:SSNLF, OTC:SSNNF) plans to spend KRW8T ($6.82B) in 2016 to increase its smartphone OLED panel capacity by over 50%, or more than 200M/year. Samsung is believed to already have the capacity to produce 300M+ smartphone OLED panels per year.
- The report follows ones indicating Apple (NASDAQ:AAPL) plans to launch iPhones featuring OLEDs in 2017, with some of the reports stating Samsung and LG Display (LPL -0.3%) will be among the suppliers. A Korean news service reported in April Samsung will supply 100M 5.5" OLEDs annually to Apple starting next year. The Nikkei suggests Apple will partly rely on OLEDs for its 2017 iPhone lineup.
- OLED materials/IP provider Universal Display (OLED +0.3%) has moved slightly higher following the report. Industrial laser maker Coherent (COHR -0.4%) also stands to benefit from major OLED investments, as does chip equipment giant Applied Materials (AMAT -1%).
Mon, May 23, 10:22 AM
- "Given recent field work, we are increasingly confident on Apple’s [OLED] adoption potential and add this to our modeled estimates for 2017-2018," writes Goldman's Brian Lee, upgrading Universal Display (OLED +10.4%) to Buy and hiking his target by $21 to $76. "Specifically, Apple and Samsung analysts Simona Jankowski and Marcus Shin, expect roughly 33mn/113mn total iPhone shipments to use OLED displays, and this is a primary driver of our 4%/25% increase in F17/F18 EPS to $1.93/$2.70 for OLED."
- His 2017 estimate is above a $1.64 consensus. Lee adds there could be a "hockey-stick" like increase in OLED use by phone OEMs in later years, and thinks Universal could eventually earn as much as $15/share in a "blue sky" scenario in which OLEDs are widely adopted for devices with larger displays, such as tablets and TV sets.
- There have already been a slew of analyst and supply chain reports indicating Apple plans to launch iPhones sporting OLEDs next year. Universal rallied on Friday after Applied Materials reported a massive increase in display equipment orders that it attributed to mobile-related OLED equipment demand.
- Shares are within $1 of a 52-week high of $63.00.
Fri, May 20, 10:56 AM
- Lam Research (LRCX +4.1%), KLA-Tencor (KLAC +2.3%), ASML (ASML +2.2%), Axcelis (ACLS +3.9%), Kulicke & Soffa (KLIC +3%), Ultratech (UTEK +3.5%), Teradyne (TER +2.3%), Rudolph Technologies (RTEC +2.6%), and Xcerra (XCRA +2.7%) are outperforming after Applied Materials (AMAT +13.2%) beat FQ2 estimates, provided FQ3 guidance that was well above consensus, and reported FQ2 orders rose 52% Q/Q and 37% Y/Y to $3.45B. The Nasdaq is up 1.2%.
- Applied's order growth was fueled in large part by display equipment orders totaling $700M, up sharply from $183M in the prior quarter and $120M a year ago. On its earnings call, AMAT said display order strength is likely to continue "over the rest of 2016," and is being driven by mobile-related OLED investments - many reports have indicated Apple plans to bring iPhones sporting OLEDs to market next year.
- OLED materials/IP provider Universal Display (OLED +5.2%) is rallying. As are display panel makers LG Display (LPL +6.5%) and AU Optronics (AUO +3.2%), each of which have been stepping up their OLED investments, and industrial laser maker Coherent (COHR +2.5%), which has recently seen an OLED-related order surge.
- Also: Applied's NAND flash-related orders more than doubled Y/Y to nearly $1B thanks to its customers' 3D NAND investments. That more than offset softer DRAM and foundry-related chip equipment demand. On the call, Applied suggested NAND orders will slow a bit in the second half of FY16, but remain strong overall. Foundry demand is expected to grow somewhat this year, with Applied gaining share. Industry wafer fab equipment demand is expected to be flat to slightly up.
- B. Riley has upgraded Applied to Buy, and several firms have hiked their targets. Cowen's Tim Arcuri thinks $3 in annual EPS is now possible. Credit Suisse's Farhan Ahmad: "AMAT is clearly outgrowing peers this year, driven by favourable mix shift within WFE (NAND/Foundry increasing, DRAM declining) and strong growth in Display (China/OLED investments)."
Thu, May 5, 4:22 PM
Wed, May 4, 5:35 PM
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Mon, Mar. 7, 2:09 PM
- Stifel's Patrick Newton, hiking his Coherent (COHR +3.2%) target by $18 to $100: "Our research indicates the Apple (NASDAQ:AAPL) supply chain is ramping for OLED production across its portfolio, likely in the 2018 timeframe, requiring a significant investment in OLED hardware, including Coherent’s Excimer Laser Assembly (ELA) Linebeam products." His FY16 (ends Sep. '16) and FY17 EPS estimates have been respectively hiked by $0.15 and $0.20 to $4.40 and $5.25; consensus is at $4.44 and $5.07.
- Newton: "We note technologies that use Coherent’s solution, specifically low temperature polysilicon (LTPS), has significantly higher share in OLED production relative to LCD. Our research indicates benefits from the OLED shift extend beyond hardware with the higher utilization of laser discharge units (LDUs) increasing the company’s service revenue relative to LCD, all else equal." He also observes Coherent's OLED-related laser sales carry higher margins than its LCD-related sales.
- The note comes five weeks after Coherent reported (along with FQ1 results) strong OLED-related orders for its Linebeam laser systems, and forecast the orders would continue through 2017. It also follows multiple reports indicating Apple plans to use OLEDs in future iPhones - the Nikkei reported of a 2018 ETA.
- Universal Display (OLED +5.1%) is going in the same direction as Coherent, much as it did after Coherent's FQ1 report. Shares have more than recovered the losses seen after Universal posted a Q4 miss and issued light 2016 guidance on Feb. 25.
Thu, Feb. 25, 5:45 PM
Thu, Feb. 25, 4:28 PM
- In addition to missing Q4 estimates, Universal Display (NASDAQ:OLED) is guiding for 2016 revenue to be up 15% Y/Y (+/- 5%). Consensus is for revenue to rise 29% to $246.3M.
- The Q4 miss is primarily blamed on "year-end inventory management by our customers and product mix weighing more to our lower priced emitters" - Samsung's smartphone ops continued having a rough time in Q4.
- Universal maintains an upbeat tone regarding long-term OLED growth. "We believe that 2016 is poised to be a year in which the OLED industry builds meaningful new capacity for the continued proliferation of OLEDs in the marketplace ... As noted by a number of companies in the ecosystem, the OLED design pipeline is growing robustly, and we anticipate that this will drive new capacity plans for 2017, 2018 and beyond."
- Q4 details: Material sales fell 1% Y/Y in Q4 to $27.8M, with a $5.3M drop in host material sales offsetting a $4.9M increase in emitter sales. Royalty/license fee revenue rose 23% to $34.4M, with Samsung contributing $30M (up from $25M a year ago). Material gross margin was 71% vs. 79% in Q3 and 57% a year ago; the year-ago figure was hurt by a $3.9M inventory write-down.
- OLED -14.3% after hours to $42.60.
- Universal's Q4 results, earnings release
Thu, Feb. 25, 4:10 PM
Wed, Feb. 24, 5:35 PM
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Thu, Feb. 18, 11:27 AM
- UBS states Samsung (OTC:SSNLF) is re-entering the OLED TV market, after having pulled out in 2014 (source: Notable Calls). Meanwhile, Korea's Pulse reports Samsung "may invest" around KRW4T ($3.3B) in OLED TV panel production over the next two years.
- The site adds Samsung is expected to order equipment for producing 8th-gen OLED panels (can be cut into six 55" OLED TV panels) "in September this year and next year," with annual panel production capacity topping 2M sq. meters in 2018. New Samsung OLED TV sets are expected in 2017 or 2018.
- LG Display (LPL +0.2%) has already unveiled plans for big OLED TV panel investments. OLED sets have won praise for their thinness, low power consumption, and superior contrast/deeper blacks, High prices have limited sales to date, but prices have gradually declined as production ramps. Sub-$2,000 LG sets are now available.
- OLED materials and IP provider Universal Display (OLED +3.9%) is having a good day ahead of its Feb. 25 Q4 report. Pulse's report comes three weeks after industrial laser maker Coherent reported receiving major OLED-related orders, while adding shipments will start in calendar Q2 and continue through 2017.
Mon, Feb. 8, 2:37 PM
- Many tech stocks are seeing 6%+ losses as investors flee to safety yet again. The Nasdaq is down 3.4%, and the S&P 2.7%.
- As was the case on Friday following Tableau and LinkedIn's disappointing guidance, a slew of enterprise tech stocks are seeing big losses, with cloud software and security tech names well-represented on the casualty list.
- Also: Solar stocks are having another brutal day (TAN -6.7%) as energy stocks get routed amid fears Chesapeake Energy is close to bankruptcy. WTI crude oil is once more near $30/barrel.
- Enterprise software decliners: Adobe (ADBE -9.6%), Paylocity (PCTY -19.1%), Salesforce (CRM -9.9%), Workday (WDAY -12%), Guidewire (GWRE -12.5%), ServiceNow (NOW -11.5%), Zendesk (ZEN -13.8%), Paycom (PAYC -13.4%), Marin Software (MRIN -10.3%), Castlight (CSLT -8.4%), Cornerstone OnDemand (CSOD -12.1%), Atlassian (TEAM -13.2%), inContact (SAAS -9.6%), and Bazaarvoice (BV -14.5%).
- Enterprise security decliners: Palo Alto Networks (PANW -12.2%), FireEye (FEYE -9.8%), CyberArk (CYBR -11.5%), Proofpoint (PFPT -12.7%), Qualys (QLYS -8.9%), Imperva (IMPV -9.7%), Rapid7 (RPD -9.4%), and Barracuda (CUDA -8.4%).
- Solar decliners: SunEdison (SUNE -11.3%), SunPower (SPWR -8.8%), JinkoSolar (JKS -7.6%), SolarEdge (SEDG -7.9%), Yingli (YGE -7.1%), TerraForm Power (TERP -10.7%), and TerraForm Global (GLBL -9.2%).
- Other major decliners: Micron (MU -9.1%), Western Digital (WDC -10.5%), Arista (ANET -10.9%), Universal Display (OLED -10.6%), Rackspace (RAX -11.3%), Fitbit (FIT -8.7%), Nimble Storage (NMBL -11.3%), Sierra Wireless (SWIR -9.9%), Rocket Fuel (FUEL -9.8%), Knowles (KN -9%), Mitel (MITL -8.9%), and Alarm.com (ALRM -8.9%).
- Previously covered: Yelp, Cognizant, Tableau, Globant, Ambarella, European tech stocks
Fri, Jan. 29, 12:39 PM
- Coherent (COHR +20.5%) missed FQ1 sales estimates (while beating on EPS) and guided on its earnings call (transcript) for FQ2 revenue of $195M-$200M, below a $208.7M consensus.
- However, the industrial laser maker also reported FQ1 bookings totaled $273M, up 32.9% Q/Q and 68% Y/Y, and good for a 1.43 book-to-bill. Moreover, a fresh bookings record is forecast for FQ2, and orders are expected to remain strong in the second half of FY16.
- CEO John Ambroseo attributed the numbers to strong OLED manufacturing-related orders for Coherent's Linebeam systems. "The first wave of orders for large format Linebeam systems to be used in OLED production accounted for the bookings increase. The second wave has already arrived in the current quarter with an order well in excess of $150 million. There are a significant number of orders pending for the balance of the second quarter and for the remainder of fiscal 2016 ... We can tell you that deliveries begin in the June quarter and run through calendar 2017."
- The disclosure comes shortly after LG Display announced new investments to ramp OLED TV panel production, and amid reports Apple plans to use OLEDs in future iPhones (one report indicated a 2018 ETA).
- OLED materials/IP provider Universal Display (OLED +8.6%) is up strongly. Coherent peers Rofin-Sinar (RSTI +4.3%), IPG Photonics (IPGP +2.6%), and Newport (NEWP +3.5%) are also doing well. The Nasdaq is up 1.5%.
- Coherent's FQ1 results, earnings release
Fri, Jan. 15, 2:53 PM
- In Wall Street's latest bloodletting, the Nasdaq is down 3.1% and the S&P 2.4%. The decline comes amid tumbling energy prices (crude is below $30/barrel), soft macro data, and disappointing earnings reports from the likes of Intel and Citigroup.
- Tech companies seeing outsized losses amid the carnage include chipmakers NXP (NXPI -8.1%), Qorvo (QRVO -8.9%), InvenSense (INVN -3.7%), IDT (IDTI -6.4%), Sigma Designs (SIGM -6.5%), and Knowles (KN -6.6%), as well as solar plays Trina (TSL -9.3%), ReneSola (SOL -11.5%), JinkoSolar (JKS -10.7%), Enphase (ENPH -8.5%), and Canadian Solar (CSIQ -8.4%).
- Also off sharply: Action camera leader GoPro (GPRO -8.7%), 3D printer maker 3D Systems (DDD -7.5%), daily deals leader Groupon (GRPN -6.4%), server interconnect provider Mellanox (MLNX -8.5%), OLED materials/IP provider Universal Display (OLED -10.3%), Latin American online marketplace MercadoLibre (MELI -7.2%), data management software firm Varonis (VRNS -8.3%), ad tech firm Rocket Fuel (FUEL -7.1%), Chinese online retailers Vipshop (VIPS -6.9%) and Jumei (JMEI -12.7%), and home automation system provider Control4 (CTRL -7.8%).
- GoPro is down 22% since issuing a Q4 warning on Wednesday afternoon. Trina has been downgraded to Neutral by Goldman. IDT and Mellanox could be affected by the weaker-than-expected Q4 sales reported for Intel's server CPU division (DCG).
- Previously covered: Chip equipment makers, Yandex/Qiwi, Intel, Textura, PC industry firms, Rackspace, CommVault, Ericsson
- Wednesday's notable decliners
Tue, Jan. 5, 6:04 PM
- HP (NYSE:HPQ) has used CES week to announce a version of its Spectree x360 notebook that sports a 15.5" 4K touchscreen. The system, which will start at $1,149, also has an optional Intel Iris GPU and comes with four front-firing speakers. (PR)
- Meanwhile, the existing 13.3" x360 is getting an optional OLED screen, making it among the first notebooks to support one. Lenovo is also showing off an OLED notebook at CES - OLED materials/IP provider Universal Display (NASDAQ:OLED) has to be pleased.
- Also unveiled by HP: 1) A 12.1" version of HP's low-cost Pavilion x2 tablet/notebook convertible that sports a 1080p display, and will start at $500; the current x2 has a 10.1" display and goes for $250. 2) New notebooks for HP's business-focused EliteBook line: The EliteBook Folio G1, which has an optional 4K display and is declared by HP to be the thinnest/lightest notebook it has ever created, and the EliteBook 1040 and 800 G3. The 1040 G3 is deemed "the world's thinnest 14" business-class notebook."
- IDC estimates HP's PC unit share rose 110 bps Y/Y in Q3 to 19.6% (#2 behind Lenovo), in spite of a 5.5% drop in shipments to 13.9M. The company's October quarter PC revenue fell 14% Y/Y to $7.7B. Desktop sales fell 17%, and notebook sales a relatively modest 5%.
Universal Display Corp. is engaged in the research, development and commercialization of organic light emitting diode (OLED), technologies and materials to display displays for wearables, smartphones, tablets and televisions, as well as solid-state lighting applications. The company develops and... More
Industry: Computer Peripherals
Country: United States
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