UPDATE: Stifel Upgrades Baidu on Growing Mobile Search Franchise
In a report published Thursday, Stifel analyst George Askew upgraded the rating on Baidu (NASDAQ: BIDU) from Hold to Buy, and named a $238.00 price target.
In the report, Stifel noted, “We are upgrading Baidu from Hold to Buy with a $238 target price. Our upgrade is based on Baidu's very rapidly growing mobile search franchise. Through innovation and acquisitions, Baidu has built a mobile search ecosystem with strong momentum and limited competition. Mobile search queries are soaring and are likely to vault past 50% of Baidu search queries in 2014. Monetization is 60% of desktop queries and improving. Volume and price should fuel Baidu's mobile revenue growth.
"Baidu's 4Q13 results were mixed with a revenue beat, but profit shortfall as discussed below. 1Q14 revenue guidance is strong, but margins will be under severe pressure due to heavy investments. For 2014 we project revenue growth of 53% and adjusted EBITDA growth of 9%; in 2015 we project revenue growth of 49% and adjusted EBITDA growth of 51%. Note our upgrade is based on the strength of its mobile search franchise, and not near-term profit performance.”
Baidu closed on Wednesday at $172.90.
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