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On Monday, Citi analysts adjusted their stance on Universal Display Corporation (NASDAQ:OLED), a leading player in the organic light-emitting diode (OLED) technology sector. The firm’s price target for Universal Display was reduced to $162 from the previous $200. With the stock currently trading near its 52-week low of $141.56, Citi maintained a Neutral rating on the company’s shares. According to InvestingPro data, the company maintains strong financial health with a robust current ratio of 7.18.
The revision comes as Citi analysts restructured their financial model for Universal Display. According to their commentary, the analysts decided to keep their earnings per share (EPS) estimates for fiscal years 2024 and 2025 unchanged. However, they recalibrated the price target, basing it on a price-to-earnings (P/E) ratio of 27 times the calendar year 2025 estimated EPS. This P/E ratio aligns with the three-year average of Universal Display’s consumable peers, marking a decrease from the prior 33 times P/E ratio used. InvestingPro analysis shows the company currently trades at a P/E of 28.51x, with an impressive gross profit margin of 75.4%. Subscribers can access 8 additional ProTips and comprehensive valuation metrics in the Pro Research Report.
The rationale behind maintaining a Neutral rating, as per Citi’s analysis, aligns with InvestingPro’s Fair Value assessment. The analysts have indicated that they are looking forward to updates that will be provided during the company’s earnings call scheduled for February 20, 2025, just 10 days away. Specifically, they are interested in developments regarding the commercialization of blue emitters and the outlook for OLED adoption across a wide range of end markets in the year 2025. The company has demonstrated consistent growth, with a 14.29% dividend increase over the last twelve months.
Universal Display Corporation specializes in the research, development, and commercialization of OLED technologies and materials. OLED technology is widely used in various applications, including smartphones, televisions, and lighting systems, due to its advantages in energy efficiency, contrast ratio, and thin form factor. The upcoming earnings call is anticipated to shed light on the company’s performance and strategic direction, which could influence investor sentiment and the stock’s future trajectory. With revenue growth of 9.63% over the last twelve months and zero debt concerns, the company maintains a solid financial foundation for future expansion.
In other recent news, Oppenheimer has maintained an Outperform rating on Universal Display Corporation, despite lowering the price target from $220 to $200. This adjustment comes amidst the firm’s increased confidence in the company’s performance over the next year, despite short-term challenges in the OLED display market. The firm anticipates a conservative guidance for 2025 from Universal Display’s management, projecting a 5% revenue growth and a 2% decline in earnings per share.
In other developments, Universal Display has expanded its board with the appointment of tech veteran April Walker, effective January 1, 2025. Walker’s extensive experience in technology and leadership roles, including senior positions at Microsoft (NASDAQ:MSFT), MetLife (NYSE:MET), NBCUniversal, and Salesforce (NYSE:CRM), is expected to support the company’s ongoing growth and exploration of new opportunities in OLED technology.
Furthermore, Universal Display has announced the appointment of Chandran Nair as the Chief Executive Officer of its new Singapore-based subsidiary, Universal Vapor Jet Corporation Pte. Ltd. Nair, who has over 26 years of leadership experience, is expected to drive the subsidiary’s operations focused on organic vapor jet printing technology. This move is part of Universal Display’s strategic shift, which also includes the closure of its Santa Clara, California location, consolidating its operations within Singapore and New Jersey.
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