Numbers Behind OLED Projections Dimming

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Jonathan Dorsheimer and David Evanson, Winter, 2012

Canaccord Genuity sustainability analyst Jonathan Dorsheimer lowered his price target on Universal Display (PANL) to $35 from $40, citing “further analysis of its economics within the OLED ramp and a lack of positive near-term catalysts.” In regard to the upcoming licensing agreement with Samsung, Mr. Dorsheimer said:

“After triangulating the disclosure in [PANL]’s filings as well as follow-ups from some recent management commentary, we now believe that the implied rate the Samsung license is based off of is lower than we originally expected. We believe that the rate is closer to 75bps,resulting in a $290-300M licensing opportunity through 2017, downfrom our earlier assumption of 100bps and a $350-375M licensingopportunity.”

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.”