Kaufman Brothers analyst Mayuresh Masurekar today raised his estimates for Baidu‘s (BIDU) Q3, which the company reports tomorrow night after the bell, and raised his price target on the stock way up, to $115, from $86.
Baidu shares are down 76 cents, almost 1%, today at $100.06.
Recent “third party data” indicates China’s Internet search industry is growing at a faster pace, writes Masurekar, citing data from iResearch indicating that the search advertising market over there expanded at a 59% rate of growth in Q3, which, combined with Q1 and Q2, is running ahead of his estimate for roughly 46% growth in 2010.
Based on that, he raised his non-GAAP EPS estimate for Baidu by 2 cents to 43 cents per share. Moreover, given that Google (GOOG) is terminating contracts with seven large Chinese ad sellers this month, which Google announced Monday night, he thinks Baidu will gain some share, and he expects a Q4 forecast better than the Street has been estimating. Masurekar is modeling 43 cents for the quarter, up from 40 cents previously.
The Street is currently modeling 41 cents for Q3 and 42 cents for Q4.
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