Market Fear In Baidu 'Potentially Overdone,' According To Jefferies

Investors in

shares haven't had exactly the easiest last month. The stock is down some 16 percent since mid April as the Street has shown concern related to a clean-up of the company's medical ads. Jefferies' analyst Karen Chan pounded the table on the stock Thursday and reiterated her Buy rating. "Despite near-term sentiment overhang, we believe recent stock correction of 16% has more than priced in potential financials impact." The analyst highlighted several levers Baidu should be able to pull in order to mitigate the mid-to-long term impact of the ad clean up: higher CPC driven by reduced paid ad slots and a potential inventory adjustment. Despite the reiterated Buy rating, Chan reduced her price target from $225 to $203. As Baidu shares closed down about 1 percent at $161.32 Thursday afternoon, the analyst's price target suggests potential upside of about 26 percent.