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10/29/14 04:27:39 PM
WORD ON THE STREET

Baidu, Inc., Coach, Inc., Alibaba Group Holding Limited

Baidu, Inc.(BIDU) : Baidu Inc's (NASDAQ: BIDU) profit margin is likely to show a continued squeeze from operating costs when the company posts earnings later Wednesday. Oppenheimer's Ella Ji expects that even as the company continues to post sharp gains in revenue, its current investment binge won't yield results until next year when its spending declines and margins widen. The company plan to make 2014 "a year of investment" is aimed at gaining market share in mobile search. It's also developing payment services as well as data analysis to boost "click-through rates," Ji said in a research note. The Beijing-based company has the lion's share of China's search market, and Morgan Stanley's Philip Wan expects the upcoming earnings report will show its mobile-based searches exceeding those from personal computers for the first time. Analysts on average expect Baidu to post profit growth of 12 percent for the recent quarter, to $9.71 per share, on revenue of 84 percent to $13.6 billion. Baidu closed down 1.9 percent to $224.55 per share. View More Analyst Ratings for BIDUView the Latest Analyst Ratings 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



Coach, Inc.(COH) : Coach Inc (NYSE: COH) remains a long ride from its hoped-for turn-around, an analyst said Monday. The New York-based high-end handbag maker opened Monday near a 52-week low in the wake of a disappointing outlook that forecast a continued steep decline in same-store sales. Shares traded recently down 1 percent. Coach is in the midst of a restructuring that will close 20 percent of its North American stores. Its Chairman Lew Frankfort said recently he will retire in November after being succeeded earlier this year as chief executive by Victor Luis. Comparable sales fell 24 percent in the recent fiscal first quarter, and although Credit Suisse's Christian Buss thinks the measure may be hitting bottom, "they're still a long way off" from turning positive. Earnings will be depressed until the second half of 2016, according to Buss, when he sees same-store sales turning positive. Buss maintains a Neutral rating on the stock and $34 target. Lower costs and low expectations helped the company deliver quarterly earnings Wednesday of $0.53 per share versus the consensus $0.43 per share. Still, that's about a 60 percent decline from a year earlier. Gross margins in the recent period continued to narrow, while international growth slowed, Buss said. While the recent earnings beat "may have highlighted some near-term stability, it's possible a true turn-around may never materialize," Deutsche Bank's David Weiner said in a note maintaining a Hold and $37 target. Improvements "will be both difficult and take a long time," Weiner said. View More Analyst Ratings for COHView the Latest Analyst Ratings 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



Alibaba Group Holding Limited(BABA) : Alibaba Group Holding Ltd's (NYSE: BABA) underwriters rushed to write reports of praise on the stock Wednesday after a 40-day "quiet period" expired. "A virtual-economy titan," said Morgan Stanley's Angela Moh. "They're surfing the Internet wave," Citi's Thomas Chong said in note. "There's an under-appreciated upside to e-commerce in China." Alibab has "a powerful ecosystem," according to SunTrust's Robert Peck, and the "potential for global expansion," in the view of Topeka's Victor Anthony. Each of the four analysts launched coverage on Alibaba with the equivalent of Buy ratings. Peck sees a kind of Trinity of "value propositions" hovering around the shares, saying "What Alibaba generates today; What Alibaba is becoming and; The optionality of what Alibaba can be long-term." Anthony offered speculation that Alibaba may move to spin-off its Alipay unit, which earlier this month changed its name to Ant Financial. The business is part of a push by Alibaba to expand into banking and financial services. Alibaba slipped 0.6 percent Wednesday at $99.04. View More Analyst Ratings for BABAView the Latest Analyst Ratings 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



 

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