Universal Display Corporation’s Q2 Preview

Analysts at Deutsche Bank provided their outlook on Universal Display Corporation (NASDAQ:OLED) ahead of the company’s upcoming Q2 earnings report, expected to be released on Aug 4.

The analysts see risks to current Street estimates for Q2 and the full 2022 year, driven by the ongoing inventory adjustments in consumer IT devices.

Macro uncertainties have intensified through Q2 and the analysts expect the company to have reduced visibility into the build plans by its customers into H2/22. Consequently, while yearly guidance is usually set conservatively at the beginning of the year, the analysts noted that the demand trajectory has worsened and they now expect the company to potentially lower its full-year revenue guidance.

Furthermore, supply constraints could remain a headwind for the company's customers. Reflecting these risks, the analysts lowered their 2022 revenue estimate from $640 million to $620 million, slightly below the guidance range of $625-650 million.

Additionally, the analysts lowered their price target on the company’s shares from $180 to $150 to reflect slower revenue growth. The analysts reiterated their buy rating.