From Barchart: 2024-11-29 10:53:00

JPMorgan analysts downgraded Baidu (NASDAQ:BIDU) from Overweight to Neutral, with a reduced price target of $87 from $130. Concerns over earnings visibility due to macroeconomic uncertainties and AI content deployment impact drove the revision.

Baidu’s 2025 adjusted EPS estimate was lowered by 21%, positioning it 17% below Street consensus. Core advertising revenue saw a 7% cut and core operating margin decreased by 6 percentage points. Recovery in core advertising revenue was expected to slow in Q1 2025, with uncertain acceleration thereafter.

Despite challenges, Baidu boasts substantial cash reserves. Net cash holdings, comprising deposits and wealth management products, make up 84% of the company’s market capitalization. This translates to a low valuation of around 2x ex-cash 2025 earnings.



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