Shares of Baidu Inc (ADR) (NASDAQ:BIDU) are falling nearly 5% to $157.76 in early trading Friday, after the Chinese Internet search provider posted mixed second-quarter results, with earnings per share of $1.22, surpassing consensus of $1.15, while profits plunged 34%, as a scandal over its policies for displaying paid ads cut into customer growth.

In reaction, Brean Capital analyst Fawne Jiang slashed her price target for the stock to $197.00 (from $220.00), while maintaining a Buy rating.

Jiang commented, “With tightened regulations and self-inflicted cleanup measures, growth of BIDU’s core search revenue will likely be muted in the next few quarters due to the ongoing implementation process with higher entry requirement and re-validation for advertisers. As such, we expect to see a negative impact on both BIDU’s top-line and bottom-line growth in the near term.”

The analyst continued, “While the reviewing process may delay some ad budget spending, revenue from quality advertisers is more likely getting pushed out instead of permanently lost. Furthermore, we believe this move will improve the company’s overall ecosystem with enhanced customer quality and user experience driving improved ROIs for its customers, which could be beneficial to the company’s long-term growth.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Fawne Jiang has a yearly average return of 5% and a 54.5% success rate. Jiang has a -2.7% average return when recommending BIDU, and is ranked #536 out of 4087 analysts.

Out of the 17 analysts polled by TipRanks, 15 rate Baidu stock a Buy, while 2 rate the stock a Hold. With a return potential of 23.1%, the stock’s consensus target price stands at $195.67.