Brian White analyst from Monness, Crespi, Hardt & Company initiated coverage on Palantir (NYSE: PLTR) with a price target of $20. This price target potentially sees the stock moving up by almost 60% from its current price.
Palantir’s defense solutions could play a greater role in the defense spending of democracies across the globe, particularly at a time when the conflict in Ukraine is still at the forefront of everyone’s minds.
In his initiation note, White said:
“Palantir has built out a strong presence across a broader scope of government organizations based in liberal democracies and demonstrated success with commercial organizations. At a time when society and government organizations around the world question the modus operandi and values of Big Tech, Palantir has taken a ‘path less followed’ relative to its tech brethren.”
PLTR chart and analysts’ predictions
PLTR had a rough start to 2022 losing 30% of its value in choppy trading sessions throughout the year. The descending channel in which the stock had traded in since October 2021 has not yet been broken though PLTR did flirt with the idea at the start of April.
Currently, the stock is wedged between the 20 and 50-day Simple Moving Averages, looking to break above and create some upwards momentum. Meanwhile, support is identified at $10.43 from a horizontal line in the daily time frame, whereas resistance is observed at $14.64 from another horizontal line in the same time frame.
Considerably lower volume has also been observed in the last couple of days.
Analysts are split on the stock with the hold rating predominating. An average price for the next 12-month analysts see is $14.44 a potential upside of 11.94% from the current trading price of $12.90.
Bullish analysts see the price reaching $21 which is in line with White’s coverage note, or roughly a 60% upside.
Defense wins championships
Lessons that can be drawn from the recent conflict at Europe’s doorstep in that free democracies need to step up and invest more in their defensive capabilities. Palantir has close ties with various defense agencies of western democracies which could put them in the driver’s seat once budgets are carved out for new defensive systems.
Palantir’s proprietary software solutions could help strengthen both western democracies and the top and bottom-line performance of the company. In the long run, it could be beneficial for their shareholders which is one of the reasons analysts seem more bullish on the stock.
Short-term risks exist even for defense stocks, rising inflation, energy and food prices may hurt the performance of Palantir as investors might pull out of the stock market. Shares of the company are trading at the lower end, however, investors will be well served by analyzing global events before deciding to make investments.
Alternatively, if you do not believe that Palantir is a viable investment, it may well be worth checking out three defensive stocks that delivered double-digit gains for investors in 2022.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.