Goldman Sachs Lifts Numbers on Baidu (BIDU) After Solid Q4, But Not Enough to Upgrade
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Price: $93.21 +1.35%
Rating Summary:
31 Buy, 9 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
31 Buy, 9 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Goldman Sachs raised estimates and their price target on Baidu (NASDAQ: BIDU) from $168 to $178 following Q4 results. The firm maintained their Neutral rating.
Q4 results were in-line, and Goldman notes that revenue growth continues to be driven more by ARPC than active customers. They said the greater-than-usual 1Q revenue quarter-over-quarter decline of 3%-6% suggested softening ad trends. Gross margins dipped 1.3pp quarter-over-quarter/1.5pp year-over-year and the company plans to maintain an aggressive investment strategy. The firm sees margin falling, as many initiatives lack monetization near-term.
Commenting on what to do with the stock, Goldman said "We view results as meeting expectations but lacking sufficiently strong operating metrics (still slow customer adds, margins likely trending downward over the next year) and additional uncertainties over mobile and social-driven search impact to drive a significant re-rating."
Goldman raised 012-13E EPS by 9% on better revenue trends and margins and introduced 2014E EPS of $8.22.
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 $141.83 yesterday.
Q4 results were in-line, and Goldman notes that revenue growth continues to be driven more by ARPC than active customers. They said the greater-than-usual 1Q revenue quarter-over-quarter decline of 3%-6% suggested softening ad trends. Gross margins dipped 1.3pp quarter-over-quarter/1.5pp year-over-year and the company plans to maintain an aggressive investment strategy. The firm sees margin falling, as many initiatives lack monetization near-term.
Commenting on what to do with the stock, Goldman said "We view results as meeting expectations but lacking sufficiently strong operating metrics (still slow customer adds, margins likely trending downward over the next year) and additional uncertainties over mobile and social-driven search impact to drive a significant re-rating."
Goldman raised 012-13E EPS by 9% on better revenue trends and margins and introduced 2014E EPS of $8.22.
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 $141.83 yesterday.
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