UPDATE: Barclays Lowers PT on Baidu.com on Reset Margins
In a report published Friday, Barclays analyst Alicia Yap reiterated an Equal-Weight rating on Baidu.com (NASDAQ: BIDU), but lowered the price target from $108.00 to $98.00.
In the report, Yap noted, “While Baidu was able to guide reasonable topline growth of 35-38% y/y for 2Q13, the significant margin decline for 1Q13 was disappointing as management affirmed that aggressive spending on sales and marketing (S&M) for its mobile products and various investments such as R&D ramp will likely to continue this year, implying margins are likely to remain under pressure. More importantly, the lack of visibility on the progress of mobile monetization suggests that it is still too early to turn positive. Hence, we maintain our cautious view and EW rating, with a new PT of US$98 (down from US$108) based on 20x (unchanged) our revised 2013E non-GAAP EPADS of US$4.91 (from US$5.38).”
Baidu.com closed on Thursday at $92.34.
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