JPMorgan Sets $262 Price Target for Palantir Ahead of Earnings
JPMorgan initiated coverage of Palantir Technologies with an overweight rating and a $262 price target just days before the company reports third-quarter results.
Palantir Technologies is scheduled to release its third-quarter financial results after the market closes on November 2. The company enters the report following four consecutive quarters of exceeding Wall Street earnings expectations, supported by the expansion of its customer base and the adoption of its Artificial Intelligence Platform.
In a move preceding the earnings call, JPMorgan initiated research coverage of the company with an overweight rating and a 12-month price target of $262. This target suggests a potential 33% rally from the Wednesday close. Analyst Brian Essex noted that large businesses are increasingly using Palantir to secure returns on AI investments and achieve AI sovereignty, which allows clients to maintain control over their entire AI stack.
Financial data from the second quarter showed revenue of $1.93 billion, a 93% year-over-year increase, and $3.37 billion in booked contracts. The company's adjusted operating margin also improved to 62% from 46% the previous year. While the stock maintains a high earnings multiple of 181, its price/earnings-to-growth ratio of 0.63 indicates it may be undervalued relative to five-year growth projections. Currently, 26 of 35 analysts rate the stock as a buy or strong buy.
