Baidu Inc. (NASDAQ: BIDU) recently has enhanced its leadership through the successful transition to mobile. Additionally this company is improving display technology to support more data format and contextual advertising on its website partners. Also, as the result of a recent business update, Baidu caught the attention of one key analyst.
Merrill Lynch has a Buy rating on Baidu and raised its price objective to $232 from the previous level of $213.
In the update, Baidu released more information about its advertiser base, paid search queries and video business (iQiyi) in its 2015 20F filing. As this information is not disclosed on a quarterly basis, Merrill Lynch only uses it as a sanity check on its 24% search sales growth forecast for 2016, which seems to be reasonable.
Annual advertisers grew by 29%, to over a million, after a slow 2014, bringing the 2013-15 compound annual growth rate (CAGR) to 18%, which is largely on track with annual growth rates between 18% and 26% in 2011 to 2013. Average advertiser spending was up by about 2% year over year, mainly due to the addition of small advertisers.
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