- Grab Holdings Ltd GRAB shares are trading higher Friday as analysts rerated the stock post its upbeat first-quarter results.
- On Thursday, Grab reported first-quarter FY23 revenue growth of 130% year-on-year to $525 million, beating the consensus of $490.1 million driven by growth across segments. EPS loss of $(0.06) is in line with the consensus.
- Benchmark analyst Fawne Jiang reiterates Grab with a Buy and a $4 price target.
- GRAB beat 1Q23 solidly, guided up FY23 adjusted EBITDA, and reconfirmed the group to break even at 4Q23.
- The stock impresses the analyst via its solid execution, including 1) meaningful reduction of incentives while sustaining growth at a robust level; 2) effectively growing driver supply in a tight labor market; 3) adoption of innovative targeted saving programs that stimulated demand without sacrificing monetization and profitability.
- The quarter testified to strong operational execution underpinned by deep local markets know-how and committed tech innovation, core competencies of GRAB.
- Jiang continues to regard GRAB as a market consolidator in Southeast Asia, with the group breakeven as a potential rerating catalyst.
- The company noted a strong growth trend QTD in mobility, benefiting from reopening and growing international travels, while delivery saw a healthy rebound post-holidays. The efficiency improvement coupled with effective cost control has sustained and driven rising profitability in delivery while narrowing Fintech loss.
- Looking ahead, with growing inbound travels and rising local mobility, the analyst boosted the firm's estimates on the stock.
- HSBC analyst Piyush Choudhary maintains Grab with a Buy and raises the price target from $4.03 to $4.2.
- Bernstein analyst Venugopal Garre maintained a Buy rating on Grab with a price target of $4.30.
- Citi analyst Alicia Yap maintained a Buy rating on Grab and set a price target of $4.80.
- Price Action: GRAB shares traded higher by 3.83% at $2.85 on the last check Friday.
- Photo via Wikimedia Commons
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