By Senad Karaahmetovic
Shares of Palantir (NYSE:PLTR) are down a further 2% in premarket Tuesday after a Deutsche Bank analyst downgraded to Sell from Hold.
Palantir shares fell over 14% yesterday on disappointing Q2 results.
The analyst argues that Q2 results changed his view of Palantir and the overall risk/reward in the stock. His new price target of $8 (down from $11) implies an almost 20% downside to yesterday’s closing price.
“While we've always been more skeptical of Palantir's commercial opportunity, our thesis was rooted in what we saw as a uniquely strong position in Public Sector. Now with the Gov't business further decelerating off of easier compares and with diminished confidence/visibility ahead, we are left with very little to support our thesis,” the analyst said.
Meanwhile, an analyst from Citi cut the price target to $6 from $7 on the Sell-rated PLTR stock after weak results and guidance.
“We think results demonstrate the diminishing tailwinds from COVID-related contracts and SPAC investments, combined with the reliance on large lumpy government deals with uncertain deal timing… we still see downside with PLTR at 10x CY23 EV/Sales and lacking FCF-support,” the analyst wrote in a client note.
On the other hand, a Raymond James analyst defends Palantir (and his recent initiation at Strong Buy).
“We are maintaining our Strong Buy rating, our $20 price target, see little risk to 3Q22 forecasts, and see limited near term negative catalysts for shares,” he told clients.