Bulls seek silver lining as Baidu hits six-year lows

|About: Baidu, Inc. (BIDU)|By:, SA News Editor

Downside outlook from Baidu (NASDAQ:BIDU) despite in-line revenues for Q1 has spooked investors, who have sent the shares down 15% on Nasdaq to their lowest point there since mid-2013.

Deutsche Bank has cut the stock to Hold from Buy, admitting an oversupplied digital media space is having a bigger-than-expected impact on the company. The bank is positive long term but looks ahead to virtually no core top-line growth for a number of quarters along with a hit to profits from investment; it's slashed its target to $147 from $289, now implying 12% upside.

Bulls, meanwhile, see a silver lining in expectations that are reset lower. Among other analysts, Mizuho's James Lee saw a slowdown coming for Q2 on factors including higher competition. He's keeping a Buy rating but lowered his price target to $195 from $205 (49% upside).

More than half of covering firms still have a Buy-equivalent rating on the stock, with consensus price targets implying more than 40% upside.

Daiwa has downgraded the stock to Hold with a $145 price target. And KeyBanc cut its price target to $179 but remains Overweight.

Previously: CCB steps to Baidu sidelines after Q1 print (May. 17 2019)

Earnings call transcript

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