Morgan Stanley analyst Keith Weiss downgraded Palantir to Underweight from Equal Weight with a $17 price target. The shares are up 155% since coming public “with very little change in the fundamental story,” Weiss tells investors in a research note. As such, the risk/reward for Palantir is now “decidedly negative” with the shares trading at 33 times estimated 2022 sales, double the average for software-as-a-service stocks, adds the analyst. Weiss sees too many outstanding questions to sustain the current valuation, including if operating expenditure cuts this year will hurt growth prospects and whether Palantir will be able to add to its base of customers.
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