- Baidu, Inc BIDU reported a second-quarter FY22 revenue decline of 5% year-on-year to $4.43 billion, beating the consensus.
- Baidu's Non-GAAP earnings per ADS of $2.36 beat the consensus.
- Mizuho analyst James Lee reiterated a Buy and price target of $275.
- Results were ahead of expectations despite the macro impact and COVID lockdowns, with the outperformance from Cloud at 31% YoY revenue growth.
- Lee believes the quarter validates Baidu's upfront investments in digital transformation for traditional sectors, autonomous driving in connected infrastructure, and OEM solutions.
- At the same time, management executed on margins, beating expectations by five percentage points, reflecting increased cost efficiency.
- With signs of continued recovery in 2H22, he feels confident about his FY24 EBITDA of 38.5 billion RMB and maintains BIDU as a top pick on China's Internet.
- Lee views the stock as attractive and sees its opportunities in Cloud and autonomous driving as "call options."
- Citi analyst Alicia Yap cut the price target to $204 from $223 and reiterated a Buy.
- The company delivered a "solid" Q2, with total revenue relatively in line while non-GAAP operating income came in stronger than expected thanks to efficient cost optimization efforts, Yap noted.
- Baidu remains well-positioned to "ride on digitalization of industrial internet, city urbanization initiatives, and carbon neutral target," he added.
- Price Action: BIDU shares traded higher by 5.35% at $145.06 on the last check Wednesday.
- Photo via Wikimedia Commons
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