Thursday, January 22, 2009

JP Morgan cuts estimates

J.P. Morgan on Friday cut its 2009 earnings forecast
and price targets for Baidu, citing slowing economic
growth and advertising revenue. J.P. Morgan had
earlier lowered its forecast for China's economic
growth this year to 7.2 percent and said the country's
advertising market growth would be flat in 2009, after
an earlier projection of 5 percent growth. The lowered
outlook comes a day after China said its economy grew
9.0 percent last year, the slowest pace in seven years.

The U.S. bank revised down its December 2009 share
price target for Baidu to $190, from $300. Baidu's
2008 fourth quarter diluted earnings per share (EPS)
forecast was cut 6.3 percent to $1.19, and the diluted EPS
forecast for the first quarter of this year by 19.1 percent
to $0.93, said the bank. Morgan expects's
revenue to fall 11.7 percent in the first quarter of 2009
from the previous quarter to $116.5 million due to the
slowing economy, but it maintained a positive view of
the company down the road. Baidu continues to improve
its technology and expand its potential to raise revenues,
and the firm leads the country's fast growing search
market, the bank said in a report.

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