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Baidu's (BIDU) Price Target Raised by UBS, Rating Upgraded

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Baidu, Inc.’s (BIDU - Free Report) price target has been recently raised more than 46% to $190 from $130 by investment firm UBS. Additionally, analysts have upgraded the stock’s rating to Buy from Neutral.

Analysts at UBS remain encouraged by the company’s growth in core revenues, namely search and feed advertising. They expect revenues to remain strong driven by product improvements and stabilization of the competitive landscape. They believe that products like managed pages and the Baidu app will act as growth catalysts.

In addition, the company recently increased the stock repurchase program by $1.5 billion. This raised the repurchase authorization to $4.5 billion.

Share Price Appreciation

A glimpse of the price trend shows that the stock has had an impressive run on the bourses over the past six months. Baidu has returned 35.5%, outperforming the industry’s 29.9% rally in the past year.


 

Analysts have become bullish about the company over the past 60 days. Its earnings estimates for fourth-quarter 2020 have seen two upward estimate revisions versus none downward movement in the said period, increasing 23.3% to $2.33 per share.

Baidu, Inc. Price and Consensus

Baidu, Inc. Price and Consensus

Baidu, Inc. price-consensus-chart | Baidu, Inc. Quote

Bottom Line

Baidu provides Internet search services in China. It also offers a China-based language search platform for businesses to reach customers.

Lately, Baidu is becoming the most significant and dominant general purpose technology. Its increasing presence in the autonomous driving space is helping it improve competitive position.

Just recently at the Apollo Ecosystem Conference, Baidu released new intelligent vehicle solutions for automakers. In addition, it has launched several high-end intelligent driving products.

Furthermore, the company was optimistic about the Apollo Go Robotaxi service, which has now been expanded to Beijing, Changsha and Cangzhou.

This makes Baidu the only company with robotaxi operations in multiple cities across China. Additionally, it has teamed up with Volvo to launch Level 4 vehicles in 2021.

Some of the current buoyancy surrounding the shares is related to the company’s dominance in the mobile search market and online video, as well as consistent product development efforts. Strong focus on leveraging the AI platform has been aiding it to provide an improved user experience.

However, higher promotional expenses, heavy spending on new growth areas and increasing competition in its own search platform pose concerns.

Zacks Rank & Other Stocks to Consider

Baidu currently carries a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the broader technology sector include The Trade Desk Inc. (TTD - Free Report) , Dropbox, Inc.  (DBX - Free Report) and Inuvo, Inc. (INUV - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for The Trade Desk, Dropbox, and Inuvo, Inc. is currently projected at 25%, 40.9% and 30%, respectively.

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