Grab Holdings Stock Declines After BofA Downgrades To ‘Underperform’: Retail Sentiment Sours

Grab Holdings ($GRAB) stock declined nearly 10% on Friday after Bank of America (BofA) reportedly downgraded the shares to ‘Underperform’ from ‘Buy’ with an unchanged price target of $4.90.

The analyst reportedly noted that Grab shares have rallied 70% since the beginning of Sept., which fully prices in the firm’s improving fundamentals.

BofA believes the stock's risk/reward is now skewed to the downside as it expects a slower pace of margin uptake in the coming times and anticipates risks from increasing competition in mobility.

Following the downgrade, retail sentiment on Stocktwits dipped into the ‘bearish’ territory (41/100) from ‘bullish’ a day ago. The move was accompanied by ‘high’ message volume.

GRAB Sentiment Meter and Message Volume as of 12:36 p.m. ET on Nov. 22, 2024 | Source: Stocktwits

Retail chatter on Stocktwits indicated a mixed reaction to the stock price dip. One user opined it is better to book profits.

However, some others believe the current decline provides a good buying opportunity and that the stock holds potential in the long term.

Grab shares have been in the spotlight after the firm recently announced its third-quarter earnings that saw revenue rise 17% year-over-year (YoY) to $716 million while operating loss narrowed to $38 million. The company swung into a profit of $15 million compared to a loss of $99 million in the same quarter a year ago.

The company also raised its full-year revenue guidance to $2.76 billion-$2.78 billion from an earlier guidance of $2.70 billion-$2.75 billion. It now expects adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $308 million-$313 million compared to a previous guidance of $250 million-$270 million.

Despite Friday’s dip, Grab shares have gained over 21% in the last one month and are up over 53% on a year-to-date basis.

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