UPDATE: Morgan Stanley Downgrades Baidu to Equal-Weight, Lowers PT on Robust Sales Expansion, yet Heavier Investment Ahead

In a report published Thursday, Morgan Stanley analyst Philip Wan downgraded the rating on

from Overweight to Equal-Weight, and lowered the price target from $185.40 to $179.60. In the report, Morgan Stanley noted, “We downgrade from OW to EW mainly due to a softer margin outlook in 2014 on heavier investments. We remain positive on Baidu's market position in PCs and its improving user penetration in mobile Internet services. Continuous sales expansion and potential cut back on discretionary spending may lead to margin stabilization.” Baidu closed on Wednesday at $172.90.