Goldman Sachs Upgrades Baidu (BIDU) to Buy, $220 Price Target

February 24, 2014 8:29 AM EST Send to a Friend
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Price: $246.03 +0.69%

Rating Summary:
    21 Buy, 1 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Goldman Sachs upgraded Baidu (NASDAQ: BIDU) from Neutral to Buy with a price target of $220.00 (from $160.00).

"Its investments in the past years, while costly, have earned Baidu a leading position in map services and location-based technology," analyst Piyush Mubayi said. "According to CNIT-Research, Baidu Map had 54% share of the mobile user traffic in October 2013 (daily queries: 3.5bn), 2.5X of its closest competitor AutoNavi. Baidu's map product is expanding beyond the traditional navigational features, becoming a comprehensive information platform that covers users' daily needs for dining, shopping and transportation services. Moreover, mobile search monetization is progressing fast. By 4Q13, we estimate that 20% of Baidu’s search revenues will come from mobile, leading to operating leverage against a relatively fixed cost structure."

The analyst estimates that Baidu will achieve 39% non-GAAP operating margin in 2014E, -2pp yoy, mainly due to marketing Baidu Map, pre-installing Baidu search app on new smartphones, and incubating subsidiaries (iQiyi, Qunar, etc.).

For an analyst ratings summary and ratings history on Baidu click here. For more ratings news on Baidu click here.

Shares of Baidu closed at $172.66 yesterday.


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