UPDATE: JMP Securities Reiterates on Universal Display on Solid Beat Driven by Demand for Green Materials

In a report published Friday, JMP Securities analyst Alex Gauna reiterated a Market Outperform rating on

, and raised the price target from $45.00 to $50.00. In the report, JMP Securities noted, “We reiterate our Market Outperform rating and raise our price target to $50 on Universal Display on a solid F3Q13 beat with sales of $32.8M (+163% y/y, Street $21.8B) driving GAAP EPS upside of $0.12 (JMP $0.01, Street ($0.05)) due to better than expected demand for its green emitter and host materials. The stock traded up >15% in aftermarket response to the strong result and the raising of full-year guidance to $142-$144M (Street $128M, prior $110-$125M). The upside in materials sales drove higher than expected gross margin contraction to 70% (-13 pts q/q), but the company indicated the volume pricing breaks it is contractually committed to are reaching their caps and we expect higher royalty revenues to provide an effective counterbalance to stem declines in the December quarter. The stock is down -23% from mid-August highs (SOX +3%) due to what we view as misplaced concerns around Samsung exposure and patent defensibility, and we continue to recommend the stock on its strong material demand trends, broadening customer base, new color materials on the horizon, and expansion into larger screen applications.” Universal Display closed on Thursday at $29.18.