Citigroup Reiterates Sell Rating, $95.10 PT on Baidu.com
In a report published Friday, Citigroup reiterated its Sell rating and $95.10 price target on Baidu.com (NASDAQ: BIDU).
Citigroup noted, “In 2013, we estimate at least 1/3 of Baidu's search traffic would come from mobile. On the mobile side, revenue pressures would come from 1) reducing CPC to improve advertisers' ROI, 2) low mobile CTR and 3) low keyword coverage on mobile. Baidu has to balance mobile's negative incremental revenue impacts with growth from PC. However, on the desktop side, 1) upward CPC trend (21% YTD) is hard to maintain in 2013 as competition from Qihoo and Sogou emerge, 2) limited upside of improving click-through-rate (CTR) to compensate the loss of traffic to competitors and increasing mobile search traffic, 3) expand customer base among SMEs. We forecast 2013E revenues to grow at 30%, vs. the consensus of 36%.”
Baidu.com closed on Wednesday at $93.24.
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