Oppenheimer Maintains Outperform, $225 Target On Baidu Following Recent China Visit

On Tuesday Oppenheimer issued a report on Baidu Inc.

amid market turmoil in China and following a visit by analysts. Currently, Oppenheimer rates Baidu.com as Outperform with a $225 price target. Jason Helfstein and Bo Pang, analysts at Oppenheimer, wrote, "As the No.1 search engine in China, BIDU benefits from the secular growth of the online advertising market in China... BIDU's expansion to location-based services (LBS) and online-to-offline (O2O), as well as its initiatives in the e-commerce/online video/ mobile app store, could become potential growth drivers." Oppenheimer analysts highlighted 3 key catalysts that can drive the company going forward: 1. Increasing the number of paid clicks Analysts wrote that Baidu's search is expected to grow at over 25 percent in 2016 and may continue to gain market share. Although Google is operating in China with non-search products, Baidu looks to have control over the Chinese search market. 2. Higher conversion rates Oppenheimer believes that the higher conversion rates can be driven by monitoring customer behaviors, which they have the capacity to exploit to increase profitability in 2016. 3. Higher cost-per-click This may allow Baidu to accelerate top-line growth and increase profitability in the near term while providing the capital necessary to continue to improve the infrastructure of their systems. Currently, Baidu.com is trading at $170.46, down 1.42 percent.