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DBS and Maybank lower Grab's TP to US$2.93 and US$4.23 respectively following 1QFY2022 results

Khairani Afifi Noordin
Khairani Afifi Noordin5/23/2022 03:32 PM GMT+08  • 3 min read
DBS and Maybank lower Grab's TP to US$2.93 and US$4.23 respectively following 1QFY2022 results
Grab’s 1QFY2022 total adjusted EBITDA loss of US$287 million was higher than DBS’s expectations of US$200 million. Photo: Grab
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DBS Group Research analyst Sachin Mittal has maintained “hold” on Grab with a decreased target price of US$2.93 — 47% lower than the previous US$5.60.

Mittal explains that the lower target price is due to DBS revising its valuation metrics to 2.8x 12-month forward enterprise value (EV) to revenue. This is in line with Grab’s global peers Uber and Doordash, which are trading at 12-months forward EV to revenue of 2.8x and 1.4x respectively.

“We have applied the higher multiple of 2.8x as Grab dominates in both food delivery and mobility segments across Southeast Asia and offers superior revenue growth. However, both Uber and Doordash generate positive adjusted EBITDA while Grab may take at least 24-months to reach positive adjusted EBITDA in our view,” says Mittal.

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