UPDATE: Nomura Reiterates Buy Rating, Lowers PT on Baidu.com on Missed Estimates

In a report published Wednesday, Nomura reiterated its Buy rating on Baidu.com

, but lowered its price target from $150.00 to $128.00. Nomura noted, “Online video kicking in, but not friendly to margins. Baidu‟s sequential 4Q12 total revenue growth came in at the higher end of guidance at -1.5% to +1.5% q-o-q. However, margins missed our estimates owing to the impact of the iQiyi consolidation and hikes in TAC and operation expenses. For 1Q13F, management has provided a revenue guidance of -4.0% to -7.0% q-o-q. We believe the transition to mobile and rising competition may continue to dampen top-line growth, with margins likely to be under pressure in the near term. The incremental spending in key sectors such as travel, education and machinery, which have not aggressively spent on search marketing in the past, represents a potential catalyst for the stock price. We maintain Buy, but cut our TP to USD 128 on our earnings estimate cuts for FY13F and beyond. Our TP is based on a discounted cash flow (DCF) valuation, assuming a WACC of 8.6% and a terminal growth rate of 3.0%.” Baidu.com closed on Tuesday at $107.20.