It is very frequent for investors to hear analysts issuing Buy ratings. Those same investors are rarely told when it’s “time to sell.” Palantir Technologies Inc. (NYSE: PLTR) is a very difficult company to analyze. Working with government agencies on secret contracts and working with the largest corporations on projects that are not widely discussed makes it difficult to project earnings and revenue targets. After Palantir’s stock rose back to $26.00, apparently enough is enough for one analyst.
The firm Monness, Crespi, Hardt & Co. downgraded Palantir to “Sell” from and already cautious “Neutral” rating. Analyst Brian White now also has a $20 price target on Palantir. That’s a call stating Palantir is more than 20% overvalued based on the prior $25.56 closing price.
Palantir’s valuations are quite high already (see below). Its stock has ridden the A.I. boom higher with more than 160% gains last year and basically up 50% so far in 2024.
White believes that stocks with inflated valuations will become more out of favor with investors. Friday’s downgrade even referred to Palantir’s valuation as a “gluttonous extreme” in the call. While Brian White sees Palantir as a likely long-term beneficiary of the artificial intelligence frenzy, the model currently faces much uncertainty.
Even at the consensus analyst targets, Palantir is still valued at 73-times expected earnings and 20-times expected revenues for 2024. Still, another analyst this same week gave Palantir quite a positive review. The independent research fitm Argus issued a new Buy rating and assigned a $29 price target on Palantir. That firm sees commercial clients adding more to the mix and sees improvements on earnings and cash flow while also admitting valuations are high and that its shares are quite volatile.
Palantir Technologies was down 4.8% at $24.32 on Friday. Many of the other A.I. stocks were being hit hard as well on continued profit taking after massive gains in 2024 and over the last year.
Oggonomics admits that “strategic bear” coverage has to be highlighted. Stocks and markets shouldn’t be expected to rise forever. Remember, “Always a bull means you are fool.” And never forget the second half of our mantra — “Always a bear, you’re broke!”
