"We estimate that Apple (AAPL) may initially need to purchases about 50k spm of gen-6 OLED capacity to support one iPhone model using 5.5 inch OLED for a 2H17 refresh," analysts noted.
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OLED Upside Chin expressed optimism regarding the company’s display division, mentioning that “one of the iPhone models could use OLED as early as 2H17 before likely wider adoption in 2018.”
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thestreet.com
NEW YORK ( TheStreet) -- Applied Materials ( AMAT - Get Report) shares are climbing 0.7% to $21.46 Thursday after UBS upgraded the company this morning to "buy" from "neutral" and raised its price target to $26 from $21.
The firm believes that organic light-emitting diode (OLED) equipment sales and higher opex leverage could give earnings a boost.
Looking ahead, one of the iPhone models could use OLED as early as the second half of fiscal 2017.
"We estimate that Apple (AAPL) may initially need to purchases about 50k spm of gen-6 OLED capacity to support one iPhone model using 5.5 inch OLED for a 2H17 refresh," analysts noted.
Based in Santa Clara, CA, Applied Materials provides manufacturing equipment, services, and software to the semiconductor, display, solar photovoltaic (PV), and related industries worldwide.
Separately, TheStreet Ratings currently has a "Buy" rating on the stock with a letter grade of B.
The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
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UBS: Time to Buy Applied Materials, Apple Could Drive Near-Term Upside
Jim Swanson , Benzinga Staff Writer
Expressing increased confidence in an EPS upside for Applied Materials, Inc. AMAT 0.8%, UBS’ Stephen Chin mentioned that OLED equipment sales, foundry capex, higher opex leverage and high exposure to China’s semis capex could drive P/E multiple expansion for the stock
The analyst upgraded the rating on Applied Materials from Neutral to Buy, while raising the price target from $21 to $27.
OLED UpsideChin expressed optimism regarding the company’s display division, mentioning that “one of the iPhone models could use OLED as early as 2H17 before likely wider adoption in 2018.”
In fact, the analyst expects Applied Material to be able to take one-third share of any new tools for the OLED ramp at Apple Inc. AAPL 0.1%.
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“We estimate that Apple may initially need to purchases about 50k spm of gen-6 OLED capacity to support one iPhone model using 5.5 inch OLED for a 2H17 refresh,” Chin stated.
The FY17 EPS estimate for the Display business has been significantly raised, given that Applied Materials is now expected to have a 20 percent share of the $8 billion market, with new products and higher layer count.
Foundry Capex & China SemisWith expectations of Foundry capex rising 1 percent in 2016 and 10 percent in 2017, Chin pointed out that Applied Materials “historically has high market share at foundry customers.”
“We are also more comfortable that Applied's new semicap products in ALD, E-Beam and Etch could help drive services sales upside closer to the industry average,” the analyst stated.
The EPS estimates for FY16 and FY17 have been raised from $1.35 to $1.37 and from $1.50 to $1.87.
Read more: benzinga.com |
