Update: Goldman Raising Price Target On Baidu.com (BIDU)

Goldman Sachs has a Buy rating and a $145 price target on shares of Baidu.com, Inc.

, up from $130. In a note to clients, Goldman writes, "(1) We now forecast Baidu continuing to gain search revenue share at about 3 percentage points per year in 2012 and 2013, as we think Google will lose critical advertiser mass (similar to Yahoo! in the US) before rival local search engines gain critical advertiser mass. (2) Thanks to share gains, we model Baidu growing revenue 50% yoy (from 43%) in 2012 and 36% yoy (from 33%) in 2013. We thus increase our 2012 EPS estimate by 4% to $3.83, and 2013 by 5% to $5.23. We forecast China search at 6 bp of GDP in 2013, versus global search at 6 bp of GDP in 2010, and US, UK and Korea search at 12-13 bp of GDP in 2010. (3) Baidu's annual report shows that paid clicks grew 56% yoy in 2010, accelerating from 17% in 2009. Implied price per click growth was 14% yoy in 2010, from 19% in 2009. We believe the paid click volume acceleration should calm concerns that Baidu is relying too much on price inflation to drive growth; we forecast paid lead volume remaining its chief growth driver in 2011 and beyond, as queries and coverage increase." Shares of BIDU gained $2.33 yesterday to close at $136.00, a gain of 1.74%.