CIMB Group Reiterates Outperform Rating, $28 PT on Qihoo 360 Technology

In a report published Wednesday, CIMB Group reiterated its Outperform rating and $28.00 price target on Qihoo 360 Technology

. CIMB Group noted, “Though 2Q12 revenue was in line with our estimate, non-GAAP earnings missed by 5% due to higher opex. The newly launched search engine and personalised homepage as well as inner pages may serve as key drivers for ad revenue growth as well as share price catalysts. We cut FY12-14 EPS by 10-20% to reflect search-related R&D and bandwidth costs, which should lead to higher earnings growth in the long term. But our target price is unchanged as we raise our target FY13 P/E from 21x to 25x, based on 0.7x PEG and enhanced FY13-16 earnings growth of 38% instead of 26%.” Qihoo 360 Technology closed on Tuesday at $21.10.