Palantir Stock Slips After Optimistic Downgrade

The brokerage firm noted it's still bullish in the long term

Deputy Editor
Jun 20, 2023 at 10:34 AM
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Palantir Technologies Inc (NYSE:PLTR) stock was last seen 1.7% lower at $16.02 after an optimistic bear note. Raymond James downgraded PLTR to "outperform" from "strong buy," and raised its price target by $3 to $18, noting that though it's still bullish in the long term, the security's recent surge in tandem with its premium valuation makes finding a near-term catalyst more challenging. 

As retail investors get more excited about artificial intelligence (AI) and take renewed interest in meme stocks after GameStop's (GME) slide, PLTR has been tearing up the charts, with guidance from its 10-day moving average helping it mark a one-year high just above the $17 level last week. So far in 2023, PLTR is up more than 153%.

The majority of covering brokerages firms are hesitant, with six of 12 rating Palantir Technologies stock a tepid "hold," while two say "strong buy," and four say "strong sell." In addition, the current 12-month consensus target price is $10.12 -- a 38% discount to current levels.

After rising 20.1% over the last month, short interest took a 6.4% haircut in the latest reporting period. However, the 148.36 million shares sold short still account for 8.3% of the stock's available float. 

Now may be an ideal time to weigh in on Palantir Technologies stock's next move with options, as the equity sports attractively priced premiums. PLTR's Schaeffer's Volatility Index (SVI) of 65% stands in the relatively low 30th percentile of readings from the last 12 months. This means the options market is pricing in low volatility expectations for the equity right now.

 

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