Cowen & Co.’s Robert Stone today reiterates an Outperform rating on shares of organic light-emitting diode (OLED) technology maker Universal Display (PANL), in advance of the company’s Q3 report tomorrow morning.
Stone believes Universal can meet the Street’s $11.7 million in revenue and penny-per-share loss estimate for the quarter, assuming lower gross margin and higher operating expenses than were the case last quarter.
A “wild card” is the exact nature of the license agreement made in August between Universal and Samsung Electronics, (SSNLF), Stone notes. However, he’s not sure how much to expect in the way of details about that agreement given that the original 8-K filing discussing the agreement has been “heavily redacted,” he writes.
Stone agrees with Canaccord Genuity’s Jonathan Dorsheimer, who today wrote that adoption of OLED materials by Apple (AAPL) for its devices’ screens does not seem imminent.
However, unlike Dorsheimer, he’s upbeat about prospects outside of Apple.
“Speculation was fueled again by a patent application for a power efficient OLED design. We believe that the non-Apple universe is large enough to support expected N-T growth (giving competitors a unique feature for now),” writes Stone.
Stone also sees intriguing prospects in television display technology:
LG Display reiterated plans for a 55″ OLED TV in mid-2012 (using Oxide TFTs), and AUO is showing a 32″ model. DuPont announced it has licensed solution- processing technology to a major Asian OEM for OLED TVs. Ultimately, we believe PANL’s PHOLED technology will play a role, thanks to power efficiency and lifetime, and signs of traction should be a major trigger.
PANL shares are down $4.84, or 9.3%, at $47.15, having recovered slightly from a drop of as much as 13% earlier in the session.
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