Citi Raises Palantir (PLTR) Price Target Ahead of Earnings; RBC Warns on Valuation

Core Insights - Palantir Technologies Inc. is being closely monitored as a significant AI stock on Wall Street, with Citi raising its price target to $190 per share from $177 ahead of Q3 earnings, anticipating strong results based on positive channel checks [1] - RBC maintains an Underperform rating with a price target of $45, citing concerns over Palantir's premium valuation and the need for a substantial earnings beat to justify its current price [2][3] Group 1: Earnings Expectations - Citi's positive outlook is based on robust Q3 results expected from both government and commercial sectors, supported by favorable intra-quarter checks from partners [1][2] - RBC's analysis indicates that Palantir's shares have increased approximately 20% over the past three months, contrasting with a 4% increase for the IGV index, highlighting the stock's premium valuation [3] Group 2: Valuation Concerns - RBC expresses skepticism about Palantir's valuation, noting it trades at over 20x EV/CY26E revenue, making it the most expensive stock in their software coverage [3] - The firm suggests that without a significant earnings surprise, Palantir's current valuation may not be sustainable [3] Group 3: Market Position - Palantir is recognized as a leading provider of artificial intelligence systems, indicating its strong position within the AI sector [3] - Despite acknowledging Palantir's potential, RBC suggests that other AI stocks may offer better upside potential with less downside risk [4]