Universal Display Corporation – Gabelli ResearchJacob Wolinsky
GabelliTV Transcript:Universal Display owns key patents for organic LED material technologies and is the sole supplier of phosphorescent emitter materials used in OLED displays. The company has 47 million shares, closed at 109 dollars per share for an equity market cap of $5.2 billion. Organic LED offers high performance display features including sharper contrast ratio, faster response time, and lower power consumption compared to LCD. There is a technology shift from LCD to OLED displays.
Apple iPhone X’s adoption of OLED is a testament of the superiority of OLED display performance. Display manufacturers are investing in multi-year and multi-billion dollars of new OLED display capacity. OLED industry’s installed base is expected to expand by about 50% in the 2017 to 2019 period. Universal Display, the market leader in emitter materials, is well positioned to capitalize on the significant growth of OLED display production.
There are also other growth catalysts including i) LG Display championing OLED TV in the high end TV market, ii) further adoption in smartphone, tablets, and wearables and iii) the rise of new OLED display manufacturers such as BOE and Sharp We see several reasons contributing to recent sharp price decline of Universal Display share from its 52-week high of $205 to $109 per share. –
First, growth deceleration in 2018 as new high volume production capacity is expected to ramp in 2019 – Second, weaker than anticipated Apple iPhoneX shipment forecast – Third, a premature speculation associated with Apple’s internal development of MicroLED display technology We calculate a Private Market Value of $146 per share in 2019. We see a buying opportunity. We are recommending purchase of Universal Display shares.