Management Team Makes Bullish Case for This Portfolio Holding

In Friday’s May Monthly Roundup, we highlighted another wave of investor conferences this week, sharing that we would mine those presentations for updated thoughts on the current quarter and 2H 2025.

The management team of Pro Portfolio holding Universal Display OLED presented at the Bank of America Global Technology Conference. While the presentation contained few surprises given our familiarity with the company, the management team shared that the current quarter is tracking a little better than expected. Industry data points point to ongoing adoption and end market diversification, something we like, as we move into the seasonally stronger second half of the year. From a technical perspective, OLED shares have quietly turned bullish.

While Bank of America has yet to issue a follow-up note from the presentation, Goldman Sachs has added OLED shares to its U.S. Conviction List with a Buy rating and a target of $183. We like the company, but we will keep our eyes open for the eventual write-up from BofA.

Now let’s turn to Universal’s presentation…

Exiting 2024, organic light-emitting diode displays accounted for 51% of the smartphone market, 4% in other IT or connected devices (including tablets, PCs and monitors), and 4% in TVs. However, as we’ve shared with you coming out of CES 2025, Mobile World Congress and other such industry trade shows, more organic light-emitting diode displays are being showcased across not only those three application buckets but also in automotive. Notable callouts on the automotive market included EV models from Mercedes, Mini Cooper and Chinese EV makers including BYD.

Universal management shared that additional industry capacity is slated to come on stream next year from Samsung and BOE, with more to follow in 2027 and 2028. Universal also shared that, while we are seeing more foldable smartphone markets come to market, there are designs for trifold models and rollable ones. While these are likely mostly concepts, should any of those designs matriculate to shipping products they would consume even more organic light-emitting diode material given their larger formats.

When we discussed Universal’s March quarter earnings, we shared a promising update on its blue materials solution. While there was no meaningful revelation during Universal’s presentation, management touched on the recent LG Display LPL announcement utilizing its blue materials. We expect there will be a period between Universal’s commercialization of its blue materials and OEMs shipping products, but with blue materials building those for red and green, the white light market is now in sight. We also think the blue materials and corresponding IP developed by Universal will lead to favorable licensing renewal agreements in the coming years.

In terms of the current quarter, Universal commented that April was a strong month for the company and with one month to go, the current quarter is tracking “a little bit better than expected.” Because the June quarter tends to be the weakest for smartphone volumes, we read this to mean adoption in other markets is proceeding. To that end, management commented that OEMs are looking to expand their portfolio of organic light-emitting diode displays across their IT product lineup.

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At the time of publication, TheStreet Pro Portfolio was long OLED.