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On Wednesday, JPMorgan analysts downgraded Grab Holdings Inc. (NASDAQ:GRAB) stock rating from Overweight to Neutral while maintaining a price target of $5.60. The decision comes after a significant 52% rally in Grab’s share price since January 24, outpacing the NASDAQ’s 31% gain over the same period. The company, currently valued at $20.58 billion with shares trading at $4.86, has delivered impressive returns of 59.19% over the past year according to InvestingPro data.
Analysts from JPMorgan suggest that now might be a good time for investors to book profits following the recent surge in Grab’s stock value. They note that buy-side earnings expectations have risen over the past year, and the current stock price seems to reflect strong future earnings growth. However, they caution that conservative fiscal year 2025 guidance could temper these expectations in the near term. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with two key tips highlighting both strong recent returns and profitability challenges. Subscribers can access 6 additional ProTips and comprehensive valuation metrics.
The firm also referenced the stock’s 13% increase after reports emerged about a potential merger between Grab and GOTO, which fueled investor optimism for substantial cost synergies and margin expansion. Nonetheless, JPMorgan expressed concerns that the merger and its anticipated benefits might not come to fruition.
Despite the downgrade, JPMorgan remains confident in Grab’s business model, citing the company’s strong network effects, which are expected to secure its market leadership and support earnings growth. Nevertheless, they recommend investors wait for more favorable entry points to accumulate shares of Grab, considering the stock’s relatively high 2025 estimated EV/EBITDA multiple of 34 times.
JPMorgan’s price target of $5.60 for Grab Holdings Inc. remains unchanged, looking ahead to December 2025.
In other recent news, Grab Holdings Inc. has been a focal point for various analysts. JPMorgan maintained its Overweight rating and $5.60 price target on the company, despite rumors of a potential all-stock acquisition of GOTO. Analysts at JPMorgan noted potential cost synergies from the deal, but also cautioned that reducing incentives might negatively affect Gross Merchandise Volume (GMV) growth.
Meanwhile, HSBC upgraded its rating on Grab from Hold to Buy, adjusting the price target slightly down to $5.45. The upgrade follows a recent decline in the company’s stock price, which analysts believe has led to more attractive valuations. HSBC analysts anticipate Grab’s on-demand GMV to grow at a Compound Annual Growth Rate (CAGR) of 14% from the estimated 2024 to 2026.
Jefferies reiterated its Buy rating on Grab, maintaining a price target of $5.10, citing expected sequential revenue growth in its deliveries and mobility segments. BofA Securities shifted its rating from Underperform to Neutral and increased the price target to $5.10, in light of a 15% decline from Grab’s recent high. The firm notes expectations for a gradual improvement in EBITDA margins for Grab’s delivery business. These recent developments underscore the diverse perspectives on Grab’s future performance.
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