Thursday, June 18, 2009

GS, James Mitchell, raises PT to $350

The firm expects Baidu to meet or beat their
Q2 revenue forecast, have stable or improving
operating margins, and positive implications
from China blocking Google's YouTube for most
of the last three months.

Specifically, GS expects Baidu to meet or beat
the 35% growth forecast for Q2, given the smooth
adoption of Phoenix Nest. Given flat headcounts
for the next 2-3 years, and reduced costs as
the Japanese startup goes beyond the initial
stage, Baidu should see margins stable, even
if TAC goes up.

2009 EPS estimate raised by 1% to $6.57.
2010, up by 7% to 9.77. For 2011, raised
by 11% to $13.12

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