JPMorgan Initiates Palantir at Overweight, $262 Price Target

JPMorgan analyst Brian Essex initiates coverage on Palantir (NASDAQ: PLTR) with an Overweight rating and a price target of $262.

“We are initiating coverage of Palantir Technologies (PLTR) with an Overweight rating and a December 2027 price target of $262, implying over 30% upside to recent levels.

As we move from a year where enterprises are just figuring out how to deploy the most transformational technology we have seen in our lifetimes to one where they are looking for return, Palantir is already delivering ROI by leveraging its platform to fundamentally transform the business operations of its customers, and growth is accelerating.

Meanwhile, demand for AI Sovereignty is accelerating. Sovereignty does not just encompass Data, but Logic, Intellectual Property, Processes, Outcomes, and Security as well.

Palantir enables Enterprise and Government organizations to secure and own their means of production and services, or their alpha and value creation.

Valuation is reasonable when taking into account the the company’s uniquely profitable hyper-growth fundamentals, with potential for substantial disruptive upside within its primary market segments.

Despite the company’s current scale, revenue this past quarter accelerated for the 12th quarter in a row to 93% y/y last quarter while non-GAAP operating margin expanded to 62% (“Rule of 155” performance) with FCF growth of 126% y/y.

Our $262 target reflects 55x CY28E EV/FCF on $11.7bn of FCF, as we forecast FCF decelerating with a three-year CAGR of 77% through CY28.We are placing PLTR on our Positive Catalyst Watch ahead of earnings on 11/2.

Although our estimates for 3Q are relatively in line with consensus, we see potential for meaningful upside with execution.”

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