Shares of Baidu.com Inc. (BIDU) are again flirting with the $400 mark after falling more than $100 in just one week back in early November.
The Chinese-language Internet search provider appears to be doing much better these days after a disappointing October, RBC Capital Markets analyst Stephen Ju said in a research note.
The firm’s checks suggests Baidu’s fourth quarter for 2007 will be better than expected. As a result, Mr. Ju boosted his sequential growth estimate by 1% to 17%, compared to the consensus at 15%. He also thinks first quarter 2008 guidance will come in ahead of consensus, and hiked his price target to $423 from $345.
Thanks to its recent e-commerce and branded advertising initiatives, Baidu is becoming more central in China’s Internet market, the analyst said, adding that a similar situation played out for Google Inc. in the U.S.
Mr. Ju said,
Whereas eBay (EBAY) and Yahoo (YHOO) occupied a central role in the past, Google (GOOG) has claimed the position of centrality through its relevant search results and focus on customer experience. We see the same dynamic for Baidu in China.