Investment firm Wall Street Zen has downgraded shares of Universal Display Corporation (NASDAQ: OLED) from a “hold” rating to a “sell” rating, according to a report published on December 30, 2023. This decision follows a series of mixed reviews from other research firms regarding the company’s stock performance.
Analysts have expressed varying opinions on Universal Display’s prospects. On December 24, 2023, Weiss Ratings maintained a “hold (C-)” rating on the stock, while Zacks Research reduced its rating from a “strong buy” to a “hold” on November 19, 2023. Conversely, Needham & Company LLC reaffirmed a “buy” rating with a price target of $150.00 on December 22, 2023. Currently, three analysts rate the stock as a buy, while four maintain a hold rating, leading to a consensus rating of “hold” with a price target of $177.60, according to MarketBeat.
Universal Display’s Financial Performance
Universal Display announced its quarterly earnings on November 6, 2023, reporting earnings per share (EPS) of $0.92. This figure fell short of the consensus estimate of $1.19 by $0.27. The company achieved a revenue of $139.61 million for the quarter, which also did not meet analyst expectations of $165.56 million. Year-over-year, revenue decreased by 13.6%, compared to the same quarter in the previous year, where the firm reported an EPS of $1.40.
Despite the missed expectations, Universal Display reported a return on equity of 14.10% and a net margin of 34.65%. Analysts predict that the company will post an EPS of 4.71 for the current fiscal year.
Dividend and Institutional Investment Activity
In addition to the earnings report, Universal Display declared a quarterly dividend of $0.45 per share, which was paid on December 31, 2023. Shareholders on record as of December 17 received this dividend, representing an annualized dividend of $1.80 and a yield of 1.5%. The ex-dividend date was also December 17, and the company’s current payout ratio is 38.79%.
Institutional investors have been actively reassessing their positions in Universal Display. During the second quarter, Baker Avenue Asset Management LP acquired a new position worth approximately $1.4 million. Similarly, Strs Ohio purchased a new stake valued at $819,000 in the first quarter. Intech Investment Management LLC increased its stake by 174.3%, owning 94,803 shares worth $13.2 million after acquiring an additional 60,238 shares. Other institutions, such as Creative Planning and Avenir Corp, also expanded their holdings, reflecting a growing interest from institutional investors. Currently, institutional investors and hedge funds hold 78.19% of Universal Display’s stock.
Universal Display Corporation remains a key player in the technology sector, specializing in organic light-emitting diode (OLED) solutions. The company develops materials and technologies essential for OLED displays and lighting, including proprietary phosphorescent OLED (PHOLED) materials. Its core business relies on licensing an extensive OLED patent portfolio to display manufacturers, facilitating the production of high-efficiency and high-performance devices.
As analysts continue to evaluate Universal Display’s performance, investors remain cautious amid recent downgrades and mixed earnings results. The forthcoming months will be crucial for the company as it navigates these challenges while aiming to maintain its position in the competitive technology market.
