Deutsche Bank Downgrades Baidu (BIDU) to Hold
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Deutsche Bank downgraded Baidu (NASDAQ: BIDU) from Buy to Hold with a price target of $201.00 (from $219.00). Analyst Alan Hellawell said the downgrade is tied to conflicting feedback on budgeting plans and lack of insight into platform clean-up progress.
"Baidu's platform clean-up should continue well through 4Q and into 2017. While large accounts are paying up 15-20% YoY on a CPC basis; smaller, performance-sensitive customers seem to be balking at declining search ROI, for alternative ad platforms such as Weibo. Recent share price strength against a weakening outlook suggests that potential O2O corporate action is largely priced in, and leads us to downgrade. We also launch an interactive model, allowing investors to change assumptions around core search, potential exit values for the O2O business, and shareholdings in Meituan and Ctrip," said Hellawell.
Shares of Baidu closed at $190.83 yesterday.
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