Goldman Cuts Target on Baidu (BIDU) to $135 as Shift to Mobile Will Likely Weigh
Tweet Send to a FriendGet Alerts BIDU Hot Sheet
Price: $99.17 -1.31%
Rating Summary:
8 Buy, 7 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
Rating Summary:
8 Buy, 7 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
Trade BIDU Now!
Analysts at Goldman Sachs lowered the firm's price target on Baidu (NASDAQ: BIDU) shares from $160 to $135 Tuesday morning. Goldman maintains a Neutral rating.
The analysts believe the stock's "recent multiple contraction reflects increased downside earnings risks from a combination of rapidly growing mobile usage and cloud investments. These trends make it critical that Baidu translates its desktop search dominance to mobile, especially as core desktop revenue growth decelerates." Risks related to expanding mobile usage include: cannibalization of desktop search and a access of information which could be used where competitive threats might be strong.
Goldman's new price target is based on 1.0x price/earnings growth, or 23x FY13 PE on earnings estimates which are about 3-8 percent lower. The firm had previously been using a 1.2x PEG multiple, and a PE multiple at 35x FY12 earnings.
With Baidu shares up 0.3 percent to $121.75 at last check, Goldman's new price target represents potential upside of about 11 percent.
For an analyst ratings summary and ratings history on Baidu click here. For more ratings news on Baidu click here.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
The analysts believe the stock's "recent multiple contraction reflects increased downside earnings risks from a combination of rapidly growing mobile usage and cloud investments. These trends make it critical that Baidu translates its desktop search dominance to mobile, especially as core desktop revenue growth decelerates." Risks related to expanding mobile usage include: cannibalization of desktop search and a access of information which could be used where competitive threats might be strong.
Goldman's new price target is based on 1.0x price/earnings growth, or 23x FY13 PE on earnings estimates which are about 3-8 percent lower. The firm had previously been using a 1.2x PEG multiple, and a PE multiple at 35x FY12 earnings.
With Baidu shares up 0.3 percent to $121.75 at last check, Goldman's new price target represents potential upside of about 11 percent.
For an analyst ratings summary and ratings history on Baidu click here. For more ratings news on Baidu click here.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- Goldman Sachs Maintains Sell on Microsoft (MSFT)
- Actavis (ACT) Fairly Valued After Run-Up - Jefferies
- UPDATE: Sterne Agee Downgrades Beazer Homes (BZH) to Neutral
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS Change, Analyst PT ChangeRelated Entities
Goldman Sachs, Earnings
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
