Baidu (BIDU) Shares Pushing Higher After Strong Q3- Analyst Round Up

Shares of Baidu Inc. (NASDAQ: BIDU) are up 4.93 percent o $107.53 in midday market movement on Friday after the company reported strong results for the third quarter, prompting bullish views from some Wall Street firms.

The leading Chinese language search engine company reported third-quarter earnings on Thursday of 45 cents per share, beating the analyst estimate of 41 cents per share.

Revenue for Baidu rose 76.4 percent to $337.2 million, beating the market consensus of $333.26 million.

Looking forward, the company sees fourth-quarter sales in the range of $354 million to $364.7 million, ahead of the consensus of $348.5 million.

Analyst Round Up

Piper Jaffray's Gene Munster upgraded Baidu on Friday from Neutral to Overweight, and raised his price target on the company by 72 percent from $81 to $139.

Munster's price target implies upside potential of about 30 percent from where the stock is currently trading.

Goldman Sachs raised their price target on Baidu from $106 to $115 following the Q3 results, while the firm maintained a Buy rating on the stock.

Goldman said that the company is a compelling "revenue expansion story," noting that revenues rose 76 percet year-over-year and EPS was up 109 percent. The firm added that traffic acquisition costs, other costs of revenue, and SG&A increased at a slower pace than revenue.

Goldman is forecasting revenue for Baidu to rise 65 percent in 2011 and 39 percent in 2011.

Susquehanna also raised its price target on Baidu on Friday from $100 to $125.

The analyst said, "The company's guidance is supported by 15 percent sequential growth in customer deposit on its balance sheet."

Duetsche Bank is not taking the same bullish stance on Baidu as other firms, saying that the firm does not expect substantial upward forecast revisions from the market

Deutsche Bank analyst says, "The trading multiple seems a bit stretched compared to growth outlook without material upward forecast revision. The stock started rerating since Jan 2010, when the Google incident led market to expect material market share gain. A better-than-expected transition to Phoenix Nest followed in 1Q. We do not expect further re-rating given the decline in upside surprise."

Deutsche Bank maintains a Hold rating on Baidu with a price target of $86.

Kaufman Bros. called Baidu a strong growth story with multiple drivers that will continue to benefit from Google Inc.'s retreat from China.

Kaufman Bros. analyst says, "We believe that Baidu will continue to benefit from the strong China online advertising market growing at approximately 50% CAGR, share gains from Google's retreat from mainland China and Baidu's own initiatives like Phoenix Nest."

Kaufman Bros. reiterated its Buy rating on Baidu.

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