---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 216358
conversation_id: 13249e84-a97e-4a83-aaf7-1a025e9e0f20
citations: 0
created: 2026-05-31 19:48:36Z
---

# Is CLSA incrementally more positive/negative on Grab. If so, why?

**Yes — CLSA has turned incrementally more positive on Grab.** The pivot point was **24 April 2025**, when CLSA **upgraded Grab from HOLD back to OUTPERFORM (O-PF)** and **raised the SOTP target price from US$4.20 to US$5.25** (subsequently maintained through the latest 9 June 2025 note). Latest note in the CLSA corpus carrying GRAB coverage is 9 June 2025.

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## Rating / target-price trajectory

| Date | Title | Rating | 12M TP |
|------|-------|--------|--------|
| 9-Sep-2024 | Fireside chat with Grab | **O-PF** | US$4.80 |
| 25-Oct-2024 | GMV momentum continues | O-PF | — |
| 12-Nov-2024 | Growth across key segments | O-PF | — |
| **20-Feb-2025** | Robust GMV but higher costs | **HLD (downgrade)** | **US$4.65** [11] |
| 12-Mar-2025 | Highlights from Asean Forum | HLD | US$4.65 [12] |
| **24-Apr-2025** | **EPS has potential to outperform** | **O-PF (upgrade)** | **US$5.25** (from US$4.20) [1][2] |
| 30-Apr-2025 | Growth & profitability equilibrium | O-PF | US$5.25 [6] |
| 20-May-2025 | Navigating M&A | O-PF | US$5.25 [8] |
| 9-Jun-2025 | Grab provides trading update | O-PF | US$5.25 [13] |

The directional shift is unambiguous: **HLD → O-PF, TP +25% in one move** (US$4.20 → US$5.25), supported by **+10% to +30% net-profit estimate upgrades** for 2025-27 [1][5].

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## Why CLSA turned more positive — the four-pillar case from the 24-Apr upgrade

CLSA explicitly cited three drivers behind raising estimates above management guidance (adj. EBITDA US$463m vs guidance US$440-470m), plus a fourth structural pillar [1]:

1. **Higher monthly transacting users (MTUs)** — Grab is widening its addressable market via customised, lower-priced offerings (Shared Saver in Deliveries, Grab for business in Mobility), anchoring CLSA's **13% 3-yr GMV CAGR in Mobility and 10% in Deliveries** [1][4].
2. **Improved Deliveries margins from economies of scale** — Delivery Hero's exit from Thailand is an explicit incremental positive for Grab as an incumbent [4]. High-margin GrabAds (~60% adj. EBITDA margin) is becoming a bigger share of GMV (>2% in 2025E vs 1.6-1.8% in 3Q-4Q24), mitigating dilution from affordability initiatives [15].
3. **Success reining in regional corporate costs (RCC)** — the very issue that drove the February HLD downgrade. CLSA cut its RCC estimate to **US$384m** (from April'25: US$415m, January'25: US$430m) [15]. The 1Q25 print confirmed this — RCC fell to US$86m vs US$91m in 1Q24 [7].
4. **Earnings inflection + balance-sheet optionality** — Adj. EBITDA forecast at **US$463m (2025) → US$885m (2027)**, a c.40% CAGR. **US$5.8bn net cash = 32% of market cap**, the highest among global peers [3]. Forecast EPS upgraded **+10.4% (2025), +23.4% (2026), +29.6% (2027)**; ROE moving from -1.6% in 2024 to **6.7% in 2027** [5].

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## What changed vs the February HLD downgrade

The Feb-20 downgrade was triggered by **2025 adj. EBITDA guidance of US$440-470m undershooting Street at ~US$0.5bn**, with CLSA flagging rising regional corporate costs as offsetting GMV gains [11]. By 24 April CLSA had pivoted because:

- **The cost problem began to resolve** — efficiency measures and AI-led cost optimisation contained RCC, and the 1Q25 print validated this with RCC down YoY [7][15].
- **GMV momentum proved durable** — 1Q25 revenue +47% YoY to US$773m, GMV +16% to US$4.9bn; Deliveries segment adj. EBITDA +50% YoY [7].
- **Management raised its own adj. EBITDA guide** to US$460-480m (from US$430-470m) at 1Q25, validating CLSA's above-guidance stance [7].
- **No demand weakening from tariff/macro concerns** — Grab saw growth intact across all segments despite Southeast Asia macro overhang [6].

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## Subsequent reinforcement (May–June 2025)

- **20-May "Navigating M&A":** CLSA added a **GoTo M&A optionality leg** to the bull case. A merger could give Grab >80% Indonesian market share and would be **accretive to adj. EBITDA per share by 33–56% (base case 46%)**, driven by Indonesia mobility/delivery margins improving 100-200bps and lower corporate costs [8][9][10]. Indonesia is Grab's largest GMV contributor but lowest margin — fixing this is the single biggest profit lever.
- **9-Jun trading update:** April-May on-demand GMV **+19% YoY**, tracking the **high end of consensus** [14]. CLSA reiterated O-PF but flagged the cap on near-term upside: Grab has said it is **not in talks with GoTo**, and margin remains range-bound given the push to lower-priced products [13].

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## Nuance — incrementally more positive, but not unreservedly bullish

CLSA's positivity is calibrated, not exuberant:

- They sit **below management's 4% 2026 Deliveries adj. EBITDA margin target** — CLSA models 2.8% (2026) and 3.2% (2027), reflecting that the same affordability strategy that's driving MTU growth caps margin expansion [4][6].
- The **June 9 note explicitly says "significant upside from consensus estimates could be limited in the near term"** without a GoTo deal [13].
- At US$5.25 TP and a 6 June price near US$5.27 [13], **implied upside is only ~2%** — the rerating has largely been earned. The story now needs the GoTo deal (or a margin surprise) to drive the next leg.

So the answer is: **CLSA was negative in Feb-Mar 2025 (HLD, TP US$4.65), turned decisively more positive on 24 April (O-PF, TP US$5.25, NP +10-30%), and has held that view since.** The catalysts were (i) cost discipline validated, (ii) Savers/Shared Saver driving MTU expansion without margin collapse, (iii) earnings inflection to GAAP profitability with peer-leading net cash, and (iv) optionality from a potential GoTo merger.

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**Sources**
[1][3][15] *Grab — O-PF (EPS has potential to outperform)* — CLSA, 24 April 2025 (upgrade note)
[2][4][5] *Grab — O-PF (EPS has potential to outperform)* — CLSA, 24 April 2025 (key tables: TP, EPS forecasts, thesis)
[6][7] *Grab — O-PF (Growth & profitability equilibrium)* — CLSA, 30 April 2025 (1Q25 review)
[8][9][10] *Grab — O-PF (Navigating M&A)* — CLSA, 20 May 2025 (GoTo M&A analysis)
[11] *Grab — HLD (Robust GMV but higher costs)* — CLSA, 20 February 2025 (downgrade note)
[12] *Grab — HLD (Highlights from Asean Forum)* — CLSA, 12 March 2025
[13][14] *Grab — O-PF (Grab provides trading update)* — CLSA, 9 June 2025 (latest)

