Baidu advances following Morgan Stanley Upgrade

Shares of Chinese Internet search engine Baidu (BIDU) are climbing on a down day for the market after Morgan Stanley upgraded the stock to Overweight from Equal Weight today.

WHAT’S NEW: Baidu’s revenue growth has accelerated as the company has improved the monetization of its PC and mobile traffic, while the fundamentals of the company’s mobile business have improved, Morgan Stanley analyst Adam De Stefano wrote.

The company’s acquisitions have also boosted its revenue growth, the analyst added. Baidu’s profit margins are likely to increase towards the end of this year, driven by continued strong sales growth and spending cuts, De Stefano believes.

The analyst set a $239.30 price target on the shares. PRICE ACTION: In mid-morning trading, Baidu rose 2.7% to $196.30. Several other Chinese Internet stocks also advanced, with SINA (SINA) climbing 3.6% to $48.45, Sohu.com (SOHU) adding 1.2% to $55.38, and NetEase (NTES) rising 1.4% to $83.10.