In a report released today, Divya Gangahar from Morgan Stanley maintained a Buy rating on Grab (GRAB – Research Report), with a price target of $5.65.
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Divya Gangahar’s rating is based on several compelling factors that highlight Grab’s potential for growth and profitability. The company’s management has identified key competitive advantages such as scale, efficiency, cross-selling, and product differentiation, which are expected to drive user base expansion and improve customer retention. Furthermore, Grab has successfully increased its geographical coverage by adding approximately 200 cities in the past two years, demonstrating robust growth in its On-Demand Services Gross Merchandise Value, particularly in Indonesia.
Additionally, Grab’s focus on advertising, especially within its Food Deliveries segment, and the promising potential of GrabMart, are seen as significant growth areas. The fintech sector also remains a priority, with efforts to scale the loan book through Digital Banks and GrabFin, emphasizing merchant loans. Cost optimization strategies, including stable headcount and the use of AI for efficiency, support the company’s ability to maintain faster top-line growth than cost increases. These strategic initiatives, combined with Grab’s attractive valuation compared to peers, underpin Divya Gangahar’s Buy rating.
Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GRAB in relation to earlier this year.