Jefferies raised the Palantir (NYSE:PLTR) price target to $24 from $22 per share on Friday, with the firm maintaining a Hold rating on the company's stock ahead of its earnings release on May 6.
The firm highlighted Palantir's impressive performance, stating that the company has been a significant beneficiary of the widespread interest in artificial intelligence. This positive trend is reflected in the stock's 31% increase for the year to date, instilling optimism in the company's future prospects.
"The question is if the company can put up back-to-back strong results - PLTR executed well last Q, but the prior 3 Qs were not as solid," said Jefferies. "Expectations have climbed higher given the stock has rallied into the print, but we believe the 1Q setup is still achievable."
"Overall growth expectations of 17% y/y (a 3pt decel on flat comps) are being driven by commercial business momentum. Consensus estimates for 1Q commercial rev call for 24% y/y growth," analysts added.
According to Jefferies, the continued execution of the AI Platform GTM motion, which already led to 500 bootcamps completed in the first four months, could drive further upside to growth.
All in all, while the firm views consensus expectations as achievable and believes that international government growth could benefit from the recent volatility in the geopolitical climate, they feel the current Palantir risk/reward "seems fair."