Deutsche Bank Reacts To Baidu's Guidance: 'The Math Doesn't Look All That Bad'

Deutsche Bank cut the price target on Baidu Inc (ADR) BIDU, but said the longer-term impairment to the search business is likely "to be very limited."

The Chinese search engine cut its second-quarter revenue guidance to a range of RMB18.100 billion ($2.807 billion) to RMB18.200 billion ($2.823 billion) from prior range of RMB20.110 billion ($3.119 billion) to RMB20.580 billion ($3.192 billion). The revised guidance came in below the consensus expectations of Rmb20.1 billion.

Related Link: Baidu's Price Target Cut 9% By Goldman

"We have come to the conclusion that a vast majority of downside revision owes to Baidu's clean-up of advertisers from the healthcare sector, and far less due to the more basic and structural reduction in the number of paid links on the results page," analyst Alan Hellawell wrote in a note.

The analyst therefore cut the price target to $203 from $209.

At the time of writing, shares of Baidu were up 2.07 percent at $164.36.