Universal Display is set for strong earnings over the next two years amid increasing use of organic light-emitting diodes for device displays, an analyst said Tuesday. OLED stock is a recent breakout.
Ewing, N.J.-based Universal Display is a key supplier of technology and materials for OLED displays.
Needham analyst James Ricchiuti reiterated his buy rating on OLED stock and raised his price target to 242 from 198.
On the stock market today, OLED stock rose 2.3% to close at 213.44.
Tailwinds For Universal Display
Universal Display is benefiting from increased adoption of OLED displays in the information technology market, Ricchiuti said. In the first quarter, shipments of OLED smartphones exceeded those of legacy LCD smartphones for the first time, he said. LCD is short for liquid-crystal display.
In May, Apple introduced its first tablets with OLED displays — the new iPad Pro in 11-inch and 13-inch screen sizes.
OLED stock has been on a tear since May 2 when Universal Display posted better-than-expected results for the first quarter and raised its outlook. The company earned $1.19 a share, up 43% year over year, on sales of $165.3 million, up 27%, in the quarter ended March 31.
OLED Stock Breaks Out
On June 11, OLED stock broke out of a 24-week consolidation pattern at a buy point of 194.84, according to IBD MarketSurge charts.
Universal Display "is expected to benefit over the next year from a better smartphone refresh cycle, increased adoption of OLED displays in the IT market, and a scaling of its new blue phosphorescent emitter," Ricchiuti said.
In addition to smartphones and tablets, OLED displays also are gaining ground in notebook computers, he said.
OLED stock is on the IBD Tech Leaders list.
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