New Target Price for Palantir After $600 Million Sale
This small-cap favorite has seen an addition to the S&P 500 and a major offload by its chair. So what's our plan?
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About two-and-a-half weeks ago, I touched base on what has been one of my (our) largest gainers for 2024 (also since initiation).
PLTR is up 123% over 12 months and up 35% over 30 days. That said, as we foretold in the mid-September piece, the shares look to have started to develop a basing period of consolidation. This is normal and technically healthy.
That last piece came just after Bank of America's high-end, five-star rated (by TipRanks) analyst Mariana Perez Mora had added Palantir to her firm's U.S. 1 List, while increasing her target price from $30 to $50. Perez Mora isn't just a run-of-the-mill five star, she is rated near the top of the five-stars at TipRanks, which is why we refer to her as "elite." This was also a few days ahead of Palantir entering the S&P 500.
Readers will recall that PLTR entered the S&P 500 hand-in-hand with Dell Technologies DELL. DELL has tumbled 10.6% since its post-addition peak. We had implied that PLTR could suffer a similar post-addition fate, but so far, the stock has moved more sideways than lower. PLTR closed on Wednesday afternoon down 1.8% from the stock's post-addition apex.
Since The Addition...
We have learned that the firm's chair, Peter Thiel, had sold more than $600 million worth (about 16 million shares) of common stock (which was not a surprise) to bring his total sales for 2024 for the year to over $1 billion. These were all planned sales, and who could blame him after the run the stock has had? Thiel has not apparently sold any of his voting shares. He, board member Stephen Cohen and CEO Alex Karp still control the company.
The firm also announced a multi-year, multi-million-dollar extension of its enterprise deal with APA Corporation APA, which is the former Apache Oil. Additionally, last week, well-known analyst Dan Ives of Wedbush, who is rated at three stars by TipRanks, reiterated his "buy" rating for PLTR, while increasing his target price from $38 to $45. Ives has been one of Palantir's most vocal bulls.
Earnings
Palantir is not expected to report third quarter results for almost a month. Wall Street is looking for an adjusted EPS of $0.09 (GAAP EPS: $0.04) on revenue of $703.7 million. If this is indeed the way the cookie crumbles, those numbers would be good for earnings growth of 29% on revenue growth of 26%. Of the 11 sell-side analysts I see that post sales estimates for Palantir, all 11 have increased their estimates since the start of the third quarter.
The Chart
Readers will see the cup-and-handle pattern with the $30 pivot that produced our old $36 target that was met in mid-September. I have since added an Andrews pitchfork model that starts in the midst of that cup's development. The stock, as it has based, has moved from almost testing the upper trendline of the model back to the center. The $36 level has turned into support as the stock trades sideways and prepares to test its 21-day EMA from above.
That test does not concern me. My eyes are on the right side of the model and the 50-day SMA that could be running together by the time the stock reaches that part of the chart. For now, we'll use the top of the pitchfork as a moving pivot until we have a more concrete technical pattern to look at. We have not had a precise target since the $36 level had been taken and held.
Target Price
- Target Price: $48
- Pivot: $40
- Add: Down to 50-day SMA ($31.90)
- Add more aggressively: Down to 200-day SMA ($24.70)
- Panic: Loss of 200-day SMA
At the time of publication, Guilfoyle was long PLTR equity.
