The analyst firm lowered its price target for the Chinese search company to $196 from $253.
Jefferies also lowered its 2015 EPS estimates for Baidu to $7.67 a share from previous estimates of $7.72 a share. The analyst firm lowered its 2016 and 2017 EPS estimate to $9.90 and $13.73 a share from $10.51 and $14.47 a share, respectively.
Jefferies analysts highlighted Baidu's first quarter results which fell below their estimates and the company's weak second quarter guidance as reasons for the downgrade.
"PC revenue showed continued softness, declining 22% QoQ and flattish YoY," Jefferies analysts wrote. "Our channel checks indicate that advertisers are starting to shift some of their ad budget allocation from keyword search to Tencent's Guangdiantong performance-based ad this year, given similar or sometimes better ad ROI."
Separately, TheStreet Ratings team rates BAIDU INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BAIDU INC (BIDU) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, growth in earnings per share, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."