Oppenheimer Cuts Price Target on Baidu.com (BIDU) Following Investigation Results Announced by CAC
Oppenheimer maintained an Outperform rating on Baidu.com (NASDAQ: BIDU), and cut the price target to $225.00 (from $240.00), following an investigation into the company's recent wrongdoing in healthcare advertising. The results were announced by the Cyberspace Administrative of China (CAC) on Monday.
Analyst Jason Helfstein commented, "We are lowering our price target to $225 from $240 following investigation results announced by the Cyberspace Administrative of China (CAC) on Monday. As required, BIDU will have to 1) stop advertising for businesses that are not meeting regulatory requirements, 2) rank search results more toward advertisers' reputation/ reliability and 3) manage ad-load below 30% across all verticals, by May 31. Although we see moderate near-term headwinds to its search business from removing unqualified advertisers, BIDU's long-term investment thesis is largely intact, in our view. Therefore, we are reducing '16/'17 revenue estimates by 2%/4% and lowering '16E/'17E EBITDA by 5%/7%, respectively, based on our ad-load checks and prioranalysis on BIDU's private hospital exposure. Maintain Outperform."
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 $169.49 yesterday.