Baidu (BIDU) PT Raised to 'Street High' $325 at Mizuho; Value of Autonomous Driving Biz Doubled to $40B

February 8, 2021 6:41 AM EST
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Price: $219.67 -3.13%

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    Up: 17 | Down: 14 | New: 42
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Mizuho Securities analyst James Lee raised the price target on Baidu (NASDAQ: BIDU) to a "Street High" $325.00 (from $250.00) while maintaining a Buy rating after raising the value of the company's Autonomous Driving (AD) business to $40 billion.

The analyst commented, "We are increasing Baidu’s Autonomous Driving (AD) business valuation from $20bn to $40bn, the major driver of raising our SOTP-based PT from $250 to $325, as China's national buildout becomes clearer, and with an estimated 500bn RMB TAM. China has laid out plans to build its AD network starting with smart transportation infrastructure across top 30 markets, and we expect OEMs to start offering integrated AD features. We believe Baidu is well-positioned as the dominant OS for both the smart transportation network and in-car technology. We forecast Baidu's core margins to be diluted by 5 points per year over next two years due to AD investments; however, we anticipate their core advertising margin remains unchanged."

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