UPDATE: Credit Suisse Upgrades Qihoo 360 Technology

Credit Suisse upgraded Qihoo 360 Technology Co Ltd (NYSE: QIHU) Tuesday from Neutral to Outperform and maintained an $84 price target after the company beat Q3 estimates.

Analyst Jialong Shi noted that “despite the strong revenue growth, we remain concerned about the intensifying competition in Chinese mobile app store market. On top of Tencent and Baidu, we learned that smartphone manufactures are also stepping up efforts to compete for high quality third-party titles.

“Qihoo needs to keep adding new features and services to its mobile app store, which by nature has little content differentiation, to enhance user stickiness.”

Shi lowered “FY14E EPS by 2 percent to factor in CB-related share dilution” and raised “FY15E EPS by 2 percent backed by higher revenue estimate.”

The report concluded, “While we remain concerned about its mobile prospect, the current cheap valuation and the US$200 mn-worth share buyback should provide good downside support for its shares.”

Qihoo 360 Technology recently traded at $76.33, up 9.8 percent.