Susquehanna upgrades Universal Display, but cautions on 'several' unknowns
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Universal Display (NASDAQ:OLED) was upgraded by Susquehanna on Thursday, though the investment firm noted there are "several unknown factors" that could impact the organic light emitting diode manufacturer's growth.
Analyst Mehdi Hosseini raised his rating to neutral from sell, noting that the company's Commercial Blue initiative should bode well for it in 2024 as the OLED display market expands to include notebooks. However, the stock has "materially underperformed" in the past, as it was down 60% between September 2019 and October 2022, while the S&P 500 was up 20% and the Philadelphia Semiconductor Index was up 50%.
Hosseini pondered whether newly published estimates for 2024 and 2025, which are roughly 24% below consensus are based on the Blue Emitter average selling price, which is a 30% premium to Green and Red. Thus Hosseini wondered whether Universal Display (OLED) can charge a higher premium despite the typical year-over-year decline associated with Green and Red. 
There's also the likelihood that Universal Display's (OLED) penetration in the smartphone market peaks between 75% and 80% by 2024, though the Blue Emitter product will likely start driving "incremental" revenue by 2024.
Hosseini also wondered whether Samsung (OTCPK:SSNLF), which bough Universal Display's (OLED) competitor Cynora, can get more concessions from the Ewing Township, New Jersey-based Universal Display (OLED), since there is no long-term contract between the two for Blue Emitter supply.
Additionally, there is the question of whether Samsung (OTCPK:SSNLF) will consolidate its TV lineup to focus on QD OLED models, as OLED penetration into TVs is expected to reach just 5% by 2025.
Hosseini also wondered whether notebook penetration would be small, potentially at just 10% by 2025; and lastly, if Apple (AAPL) introduced a foldable iPhone, it's likely that Universal Display's (OLED) Emitter would not see a "dramatic increase" in revenue mix.
Earlier this week, Universal Display (OLED) announced an OLED evaluation deal with Japanese panel maker Seiko Epson.
Analysts are largely cautious on Universal Display (OLED). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates OLED a HOLD.