Wall Street analysts are optimistic about Grab (GRAB), but should you invest?
Singapore: When it comes to buying or selling stocks, many folks look to analysts for guidance. But do these recommendations really matter? Let’s dive into what Wall Street thinks about Grab Holdings Limited (GRAB).
Currently, Grab has an average brokerage recommendation of 1.53, which is pretty close to a Strong Buy. This score comes from 16 brokerage firms, with 12 saying Strong Buy and one saying Buy. So, it seems like most analysts are pretty bullish on Grab.
However, just because the analysts are optimistic doesn’t mean you should rush to invest. Studies show that brokerage recommendations don’t always lead to the best stock picks. Sometimes, these firms have their own interests at heart, which can skew their ratings.
For instance, they tend to give five Strong Buy ratings for every one Strong Sell. This means their recommendations might not always align with what retail investors need to know about a stock’s future price.
To make better decisions, it’s smart to use these ratings to back up your own research. One tool that can help is the Zacks Rank, which categorizes stocks based on earnings estimate revisions. This method has a solid track record for predicting stock performance.
It’s important to note that Zacks Rank and the average brokerage recommendation are different. The ABR is based solely on analyst ratings, while Zacks Rank uses earnings estimates, which can give a clearer picture of where a stock might be headed.
Looking at Grab’s earnings estimates, the Zacks Consensus Estimate for this year hasn’t changed and sits at -$0.03. This steady outlook suggests that Grab might perform similarly to the broader market soon.
Given the current Zacks Rank of #3 (Hold) for Grab, it might be wise to approach the Buy recommendation with caution. So, while analysts are optimistic, it’s always good to do your own homework before jumping in.
