Citi cut target price for Baidu ADR, kept Buy rating

 

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Chinese online search engine Baidu’s second-quarter earnings are expected to meet the bank’s and the market’s expectations, said Citi Research in a note.

Baidu’s core advertising revenue is expected to grow by 11.5% year over year to 19.1 billion yuan in the second quarter, benefiting from the rebound in ad spending in the offline vertical industries and Baidu AI Cloud’s revenue is forecast to grow by 3% to 4.39 billion yuan, the bank estimated. 

Citi expects Baidu’s overall net revenue for the quarter to grow 12.8% year over year to 33.46 billion yuan, with non-GAAP earnings per ADS to reach 14.48 yuan. Revenue from its core business is expected to grow 10.8% to 25.7 billion yuan, with non-advertising revenue growing 9% to 6.6 billion yuan.

Citi lowered its overall revenue forecasts for 2023 to 2025 by 0.9%, 0.8% and 0.9%, and its non-GAAP net profit forecasts by 1.3%, 1.1% and 1.3% respectively, which reflected the impact from iQiyi and slowing cloud revenue. 

Citi Research lowered target price for Baidu ADR from $184 to $181, and maintained Buy rating.