Friday, July 31, 2009

More analyst action: DB, JPM, Nomura, CS

Deutsche upped PT from $374 to $408.
Deutsche Bank said they got a peek into the black box,
conducting an on-line, interactive tutorial of Baidu's
many properties and services. Deutsche Bank said
they have also concluded that pricing continues to
improve, and that market share should be
steady-to-up. The firm also raised their 2009/2010 EPS
by 2% and 5% to $6.48 and $10.48, respectively.

JPM's Dick Wei sets a PT of $390. Expects revenue to
grow 40 to 50% for the next couple of years.

"Baidu has a significant lead in market share, there is
only 25 percent penetration and people know the brand,"
said Wei. "The share price still has room to rise." Wei
says Baidu is one of J.P. Morgan's top picks in the sector
and recommends an overweight for the stock.

Nomura downgraded from "neutral" to "reduce" with a PT
of $311.3.
"It is trading at a premium to pre-financial crisis valuations,"
said Jin Yoon, an analyst at Nomura International. "Where
does the stock go from here? Its overheated", it's a case of
liking the company but not the stock, said Yoon. "The
company is still highly correlated to the broader economy,
which is not out of the woods yet," said Yoon.

Credit Suisse says Baidu is expensive and has a target price
of $248, implying a PE ratio of 39 times forecast
2009 earnings. Credit Suisse reckons traffic acquisition
cost (TAC) -- a key barometer of profit margins -- as a
percent of total gross revenue rose 16.0 percent in second
quarter, from 12.7 percent a year earlier, and could hit
17.3 percent in 2010. ($=6.83 yuan)

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