Shares of Baidu were up about 4% in Monday’s pre-market session, as China’s search giant announced a strategic partnership with automaker Zhejiang Geely Holding Group (Geely) for the manufacturing of electric vehicles (EV). Notably, Baidu’s move will mark its debut in the EV space.
As part of the partnership, China’s leading internet company, Baidu (BIDU), will provide smart driving technologies. Meanwhile, Geely will be in charge of designing and manufacturing electric cars.
China has gradually become the world’s largest EV market and Baidu’s CEO Robin Li believes that customers are now looking for more intelligent EVs. Li said, “by combining Baidu’s expertise in smart transportation, connected vehicles and autonomous driving with Geely’s expertise as a leading automobile and EV manufacturer, the new partnership will pave the way for future passenger vehicles.” (See BIDU stock analysis on TipRanks)
On Jan. 8, Mizuho Securities analyst James Lee raised the stock’s price target to $250 (4.1% upside potential) from $185 and maintained a Buy rating. The analyst remains optimistic about Baidu’s prospects in 2021 as he expects the company to benefit from increased e-commerce penetration and advertising in both the U.S. and China.
Consensus among analysts is a Strong Buy based on 11 Buys and 2 Holds. The average price target of $188.77 implies downside potential of 21.4% over the next 12 months. That’s after shares rallied about 75.7% over the past year.