UPDATE: Maxim Group Upgrades Baidu on Likely Solid Core Business Growth, Limited Upside

In a report published Wednesday, Maxim Group analyst Echo He upgraded the rating on Baidu BIDU from Sell to Hold, but removed the $95.00 price target. In the report, Maxim Group noted, “We believe BIDU's near-term top line growth, mainly driven by solid core (PC) business, will likely exceed consensus expectations. As previously discussed, we estimate that China's search ad has penetrated less than 20% of the total market. There is plenty headroom for BIDU to continue pushing into lower-tier businesses building on its established market dominancy. BIDU has been reluctant to do so in the past likely due to increasing marginal costs accompanied with further penetration. Now facing increasing competition, especially from Qihoo (QIHU - $77.24 - Buy) and Alibaba (private), BIDU is aggressively penetrating the PC market to make up for the fact that its search traffic declined to ~65% in September[.]” Baidu closed on Tuesday at $148.75.