On Wednesday, Oppenheimer raised its price target for Universal Display (NASDAQ:OLED) Corporation (NASDAQ:OLED) shares to $250 from the previous $200, while maintaining an Outperform rating on the stock. The new target reflects an optimistic view of the smartphone market's prospects in the coming years, particularly for premium models equipped with OLED screens.
The firm's outlook is buoyed by expectations of a robust smartphone replacement cycle, driven by new artificial intelligence (AI) features in upcoming iPhone and Android devices. Universal Display, which specializes in OLED technology, is anticipated to gain significantly from this trend due to the prevalence of OLED displays in high-end smartphones.
The anticipation of forthcoming product announcements and the possibility of upward revisions to management guidance are contributing factors to the positive outlook for Universal Display. The firm projects that these developments will likely lead to further positive earnings revisions and an expansion of the stock's multiple.
The analyst from Oppenheimer underscored the unique position of Universal Display in the market, given the dominance of OLED displays among premium smartphones. The expected incremental growth in this sector is seen as a clear advantage for the company.
In summary, the revised price target of $250, up from $200, is based on the analyst's raised estimates for OLED, which are underpinned by a stronger forecast for the smartphone market in 2024 and 2025. The firm reiterates its Outperform rating for Universal Display, signaling confidence in the stock's performance potential.
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