RBC analyst Rishi Jaluria upgraded Palantir (PLTR) to Sector Perform from Underperform with a $12.00 per share price target, up from $9.00.
The analyst believes that Palantir is still facing long-term headwinds. Although he remains cautious on shares, he lists 3 reasons behind the upgrade call:
- Near-term upside could come from Government set up;
- SPAC investments are likely coming to an end; and
- Risk-reward better after selloff.
The analyst is particularly positive on the government demand amid Russian invasion of Ukraine.
“We believe as the war drags on, governments around the world are increasing their defense spending (including against cyber-attacks) and we expect Palantir to be a beneficiary ofthistrend. We do believe this could be only a short-term tailwind, butin our view could be enough to accelerate the Government business. Although our US federal government spending tracker does not capture this yet, we acknowledge theUS federal budget was not completed until mid-March and non-US Government (24% of CY21 Government revenues) could see upside before the US,” Jaluria said in a client note.
Jaluria downgraded PLTR in November last year with shares down nearly 50% since then. This strong selloff and the Russia-Ukraine conflict “make Palantir a difficult stock to short in the near-term,” the analyst concluded.
By Senad Karaahmetovic