Investors beware! Palantir Technologies’ (PLTR) stock could fall 25% in coming months, warns investment bank Morgan Stanley (MS).
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In a note to clients, Morgan Stanley stressed that PLTR stock is grossly overvalued after rising more than 350% in the last 12 months. Most of the gains have come as Palantir is seen as a beneficiary of the Artificial Intelligence (AI) trade. However, a reset for the stock is now likely after such as big run, says Morgan Stanley.
“While acknowledging this positive inflection and looking for ways to get more constructive on shares, the lack of visibility of material estimate revisions leaves PLTR trading too far ahead of the company’s intrinsic value to justify a rating upgrade,” reads the report to the investment bank’s clients.
Sell Rating
Morgan Stanley has maintained a Sell-equivalent “underweight” rating on PLTR stock since August 2023 and is not planning any changes currently. At the same time, the bank maintains a price target on Plantir’s shares of $60 over the next 12 months, which is about 25% below current levels.
“Bullish investors have pointed to several ties between Palantir and the incoming Trump administration as potential tailwinds for the stock going into next year… However, we see a risk of any such (ties) leading shares higher in the near-term.”
Is PLTR Stock a Buy?
Palantir’s stock currently has a consensus Hold rating among 16 Wall Street analysts. That rating is based on two Buy, eight Hold, and six Sell recommendations made in the past three months. The average PLTR stock price target of $44.85 implies 40% downside risk from current levels.
