Olympics Will Be Positive for Baidu (BIDU) Earnings -Piper Jaffray

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Today, Piper Jaffray is out with a research note considering the impacts of the Olympics on traffic at Baidu.com (Nasdaq: BIDU). The firm maintains a Buy rating and $430 price target on Baidu.

To begin, the firm notes that it has yet to see any material effects from the May earthquake in China on Baidu's operations, saying it "remains comfortable" with its current Q2 estimates. Piper expects Baidu to report in-line to slightly above the Street Q2 revenues, given "continued increases in revenue per customers." Moreover, the firm sees Baidu maintaining its revenue guidance for the September quarter (Q3) as it likes the company's potential for increased traffic during the Olympic games.

Piper believes that more Chinese people will be at home during the Olympics, due to "travel restrictions, factory, & industry shut downs related to the games." The firm feels this will "result in greater time spent with Baidu, resulting in a September increase in search activity and paid clicks."

With shares of Baidu trading around $317 today, Piper's price target represents a potential gain of more than 35% from current levels.

Baidu.com, Inc., through its subsidiaries, provides Chinese language Internet search services primarily in the People's Republic of China.

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