Universal Display Shares Dropped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of organic light-emitting diode specialist Universal Display (Nasdaq: PANL  ) were projecting weakness today, falling as much as 13% in intraday trading after some sour comments from a Wall Street analyst.

So what: Canaccord Genuity's Jonathan Dorsheimer stepped back his price target for Universal Display's stock, from $40 to $35. The change was due in large part to a change in estimates for the company's licensing agreement with a unit of Samsung Electronics. Dorsheimer had previously expected that the opportunity was worth $350 million to $375 million, but now sees it in a range of $290 million to $300 million. The analyst also said that there is a "lack of positive near-term catalysts" for Universal and that the excitement from the upcoming Consumer Electronics Show is likely already priced in.

Now what: As the stock's price action makes obvious, investors are not happy about Dorsheimer's less-sanguine take. To be sure, the analyst's reevaluation could be a good reason for Universal Display bulls to revisit their views on the stock and assess whether there's still a good opportunity there. However, it's also important to keep in mind that these are simply the views of one person and don't represent a definitive bottom line on the stock or the company. So while investors shouldn't ignore the Canaccord report, it'd likely be foolish (little "f"!) to sell only because of that one view.

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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

Read/Post Comments (7) | Recommend This Article (4)

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  • Report this Comment On January 03, 2012, at 5:41 PM, EquityBull wrote:

    I usually do the opposite of analysts calls. This has made me a ton of money. They are always either late or wrong.

  • Report this Comment On January 03, 2012, at 8:01 PM, sidneyleejohnson wrote:

    Dear Mr. Dorsheimer said

    "uncertainties with respect to UDC's specific role within this secular trend".


    Lets be clear the "secular trend" in oled is due to the intellectual advancements of the researchers that panl supports. There is no trend in oled without panl's sponsored advancements. OLED was dead on arrival without the improvements of PHOLED. The analyst doesn't know what UDC's role is? Seriously, how insulting is that to the company at the epicenter of the oled revolution. You think SMD's 6 year long strategic partnership doesn't make it clear what their role is. Mr. Dorsheimer, what shred of credibility can your analysis possibly have with a statement as moronic as that?

  • Report this Comment On January 03, 2012, at 8:16 PM, sidneyleejohnson wrote:

    If a restaurant analyst had said "uncertainties with respect to McDonald's specific role in this secular trend" in 1985 how long do you think he would have kept his job?

  • Report this Comment On January 03, 2012, at 9:40 PM, wipster56 wrote:

    IMHO, having the price drop today was great as I has planned on buying about 100 shares tonight and this youwho's opinion just made my purchase considerably more attractive. It's sometimes great to have the market pay attention to someone who has absolutely no concept of the big picture...

  • Report this Comment On January 03, 2012, at 10:56 PM, sidneyleejohnson wrote:

    Per Barrons,

    on June 2011

    [JD] contends the Street is “underestimating the timing and earnings power for OLEDs and Universal Display’s model,” he writes.

    He says Universal holds “the key fundamental patent associated with phosphorescent OLED technology and has built a strong patent portfolio around this key technology.”

    JD has flip flopped on UDC and now claims "uncertainty" regarding its role in the secular oled trend after it signed a strategic partnership with the dominant(>98%) manufacturer of pholed through 2017.... HUH?

    JD, why should UDC even speak to you after an inflammatory remark like that?

    "Previewing the upcoming 2012 International CES event held by the Consumer Electronics Association, Mr. Dorsheimer added, “CES will likely have many impressive large and small area OLED displays, but we feel at this stage most investors are already expecting these demonstrations and already pricing most of CES into shares.” JD, how can a stock off nearly 50% from its highs be determined to have priced in an event that has yet to take place?

    JD's remarks are just audacious and preposterous.

  • Report this Comment On January 03, 2012, at 11:00 PM, sidneyleejohnson wrote:

    watch the news from SMD regarding oled expansion

    This is essentially the most reliable indicator for PANL revenue growth around. All the analysts can't hold a candle to the correlation between SMD smartphone sales growth and PANL revenue growth.


  • Report this Comment On January 04, 2012, at 9:56 AM, Eohippus617 wrote:

    Again - even if he is right (which I doubt) does that mean the PANL will not sign a single other deal in the next 4 years? What about LG, AU, HTC, Sony etc.

    What about Blue Pholed?

    What about lighting? Tablet screens, TV screens,

    Using the same McDonalds analogy as above, Its like saying Big Mac sales are flat but ignoring that fries and the quarter pounder sales are poised to double...

    All I can say is thank you, I bought more yesterday!

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