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Baidu share price: Why Citi and JPMorgan analysts raised their price targets to US$290

Analysts see a further 12% upside on the Chinese search engine giant’s shares, which closed at a 2.5-year high this week.

  • Baidu’s (NASDAQ: BIDU) share price has surged nearly 20% since 11 January 2021
  • The search engine company announced an electric vehicle manufacturing partnership with automobile company Geely on 10 January
  • Shares continue to rally, closing at a 2.5-year high of US$260.90 on Tuesday (19 January)
  • Citi and JPMorgan analysts recently raised their price targets on BIDU by over 50% respectively
  • Trade Baidu, long or short, with an IG account now

Baidu share price: the latest

Chinese search engine company Baidu’s share price has burgeoned roughly 19% since announcing that it would be entering the electric vehicle (EV) space.

On 10 January 2021, the internet conglomerate said it has entered into a strategic partnership with Zhejiang Geely Holding Group to produce intelligent electric cars.

As part of the venture, Baidu will provide its self-driving capabilities and technological insights, while Geely will contribute its expertise in automobile design and manufacturing.

Following that, Baidu’s shares rallied over 9% between 11 January and 12 January.

Share price continues to remain lifted, closing at US$260.90 apiece on Tuesday (19 January). The stock hit an all-time high price of US$273 on 15 June 2018.

BIDU removed from US investment blacklist

BIDU received a further boost on Thursday (14 January), after US authorities decided to remove the company from its investment blacklist last week.

Two weeks ago, senior Trump administration officials were said to be mulling an investment ban on Baidu, alongside fellow technology players Alibaba and Tencent.

If the plan had been approved, US investors would have been prohibited from trading the securities of these companies.

The search engine giant’s stocks surged 7.4% after the report.

Where next for the Baidu stock?

On 19 January, Citi analyst Alicia Yap raised her firm’s price target on Baidu to US$292 from US$183 while maintaining a ‘buy’ rating. This represents a 11.9% upside from the stock’s last traded price.

Yap raised her ‘sum-of-the-part assumptions’ to account for potential upside from Baidu's autonomous driving technology and upcoming EV projects.

She wrote in a note that Baidu shares still have growth potential, especially if the fundamental advertising recovery trend turns out stronger than expected, and if the EV and autonomous driving-related initiatives begin to get monetised.

JPMorgan analyst Alex Yao also raised his price target on the stock to US$290 from US$155 on 14 January, reiterating an ‘overweight’ rating.

The analyst views Baidu's entry into smart car manufacturing via its joint venture with Geely ‘as a catalyst to unlocking value in Baidu's broader intelligent driving investment’.

Yao assigned a US$14 billion valuation to Apollo, Baidu's intelligence driving turnkey solution, and the joint venture with Geely, representing 17% of the company’s current market cap.

How to trade Baidu with IG

Are you feeling bullish or bearish on BIDU’s stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Baidu Inc> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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