Key insights
- Morgan Stanley reiterates Overweight on Grab (GRAB) despite Indonesia's new ride-hailing commission cap of 8%, which is below current levels. The regulation's details are unclear, impacting 17-19% of Grab's Mobility GMV. Grab will report Q1 earnings on Tuesday. A $400M share repurchase program is underway. Regulatory uncertainty and potential margin compression in a key market are slight negatives for US-listed GRAB.
Investing.com - Morgan Stanley reiterated an Overweight rating and $6.40 price target on Grab Holdings Inc. (NASDAQ:GRAB) following Indonesia’s announcement of new ride-hailing regulations. The stock currently trades at $3.63, near its InvestingPro Fair Value of $4.55, suggesting the market may be undervaluing the company amid regulatory uncertainty.
Indonesia’s President Prabowo announced a regulation capping ride-hailing platform commissions at a maximum of 8%, below current levels of 15-20%. The announcement came as a surprise after Grab stated during its fourth-quarter earnings call in February 2026 that no changes to commission caps were being proposed.
Details on the effective date, scope including whether it applies to four-wheel vehicles, and other stipulations on platform pricing and incentives remain unknown. Indonesia represents 17-19% of Grab’s Mobility GMV and approximately 20% of its consolidated EBITDA.
The regulation also mandates expanded social protections and insurance for drivers, including all gig workers in deliveries. Grab had already earmarked a Rp100 billion welfare program for driver partners in January 2026, which included employment insurance.
Grab is scheduled to report first-quarter results on Tuesday morning. The stock is trading near its 52-week low of $3.48, down 36% over the past six months as regulatory concerns mount. According to InvestingPro, which offers comprehensive analysis including 8 additional exclusive tips for GRAB, analysts still predict the company will remain profitable this year. Morgan Stanley expects the company and competitor GoTo could seek clarifications from the government over the weekend.
In other recent news, Grab Holdings Ltd has announced a significant move to repurchase up to $400 million of its Class A ordinary shares. This initiative is part of a previously authorized $500 million share repurchase program, involving agreements with JPMorgan Chase Bank and Morgan Stanley. Additionally, Grab’s shareholders approved a special resolution to amend the company’s memorandum and articles of association, transitioning to a Third Amended and Restated version.
In a strategic expansion, Grab has unveiled plans to acquire Delivery Hero’s foodpanda delivery business in Taiwan for $600 million, marking its first venture outside Southeast Asia. The acquisition is expected to enhance Grab’s revenue by 2026 and adjusted EBITDA by 2028, according to Jefferies. Barclays and Jefferies have both reiterated favorable ratings on Grab, with price targets of $7.00 and $6.70, respectively. Furthermore, BofA Securities maintained a Buy rating with a $6.20 price target, indicating a positive outlook on the company’s risk-reward profile.
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