GRAB: Market Share Could Expand Significantly on Potential Indonesia Merger

Analysts have raised their price target for Grab Holdings by $0.35 to $6.80, citing stronger than expected Q3 results, revised FY25 guidance, and improved long-term growth prospects.

Analyst Commentary

Recent Street research highlights a mix of positive outlooks and valuation-driven caution regarding Grab Holdings following its Q3 results and updated guidance.

• Bullish analysts consistently raised their price targets for Grab Holdings, with figures now trending toward the $7 level. This reflects increased long-term confidence.
• Stronger than expected Q3 results and an improved growth outlook for both FY25 and FY26 led to expectations of sustained momentum. Management is seen as pivoting towards scaling topline growth.
• Grab’s leading market position in Southeast Asia and its scale-driven efficiency are viewed as key competitive advantages that support ongoing share gains and margin improvements.
• Upward revisions to earnings estimates and growth projections indicate belief in the company’s ability to outperform consensus expectations going forward.

• Some bearish analysts highlighted valuation concerns, particularly after a recent 30% rally in Grab's share price. This has prompted downgrades and recommendations for caution in the near term.
• While long-term growth levers are acknowledged, short-term upside may be limited as the market digests the substantial recent gains in the stock’s valuation.
• Neutral or hold stances emphasize the need for sustained execution on growth and margin targets to justify higher valuation multiples.

What's in the News

• Grab and GoTo are reportedly in talks to offer Indonesia's sovereign wealth fund, Danantara, a "golden share" to secure approval for a potential $29 billion merger. This would grant special rights over Indonesian operations (Financial Times).
• Indonesia is discussing plans for a potential merger or acquisition between Grab and its rival GoTo Gojek, which could lead to a combined market share of over 91% in the country (Reuters).
• Grab and partner WeRide have received approval from Singapore's Land Transport Authority to conduct expanded autonomous vehicle testing with the Ai.R fleet in the Punggol district. They plan to increase AV test runs by up to four times by year-end.
• Grab revised full-year 2025 group revenue guidance upwards to a new range of $3.38 to $3.40 billion.
• Grab and May Mobility have announced a multi-year partnership to integrate autonomous driving technology and expand AV services throughout Southeast Asia.

Valuation Changes

• Consensus Analyst Price Target has risen slightly from $6.45 to $6.80. This reflects updated expectations.
• Discount Rate has edged down marginally from 7.65% to approximately 7.65%, indicating little change in the perceived risk profile.
• Revenue Growth forecast is up, increasing from 20.5% to 22.6%. This suggests improved long-term top-line prospects.
• Net Profit Margin estimate has improved, moving from 14.9% to 15.6%. This highlights expectations of stronger profitability.
• Future Price-to-Earnings (P/E) multiple has fallen, shifting from 42.4x to 39.1x. This suggests expectations for higher future earnings relative to the share price.