Brean Capital Remains Positive On Baidu Despite Disappointing 4Q Earnings

In a research report issued today, Brean Capital analyst Fawne Jiang reiterated a Buy rating on Baidu (NASDAQ:BIDU), but reduced the price target to $250 (from $275), as the company reported weaker-than-expected fourth-quarter earnings. The company reported net income of $520.4 million and adjusted earnings per share of $1.61, below consensus estimate of $1.67.

Jiang wrote, “We view 4Q below-expectation earnings (and largely soft 1Q guidance) a short-term hiccup in nature, whether upon timing of Chinese New Year or near-term lag on mobile monetization with fast mobile adoption. Despite the near-term weakness, BIDU’s underlying fundamentals seem to be intact, in our view, with management confident about revenue acceleration in the coming quarters. Increasing costs in FY2015 should be largely driven by brand campaign and promotional activities, which will add pressure to margins but can be incrementally mitigated if top-line growth accelerates. As such, we reiterate our Buy rating on BIDU stock, but lower our TP to $250, reflecting more conservative assumptions on earnings growth.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Fawne Jiang has a total average return of -4.8% and a 28.3% success rate. Jiang has a 8.6% average return when recommending BIDU, and is ranked #3241 out of 3510 analysts.

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