Morgan Stanley assumed coverage on Palantir $PLTR with an Underweight rating and a price target of $60, citing concerns that the stock is trading well ahead of its intrinsic value despite positive developments. In summary, the analyst noted that the company’s positioning in the generative AI space is strong and they are showing improved growth metrics but that the 2024 share price increase was primarily driven by multiple expansion rather than revenue growth. Key concerns include muted revenue upside, reliance on expense discipline for free cash flow (FCF) improvements, a less impactful contribution from the commercial AI narrative, and the stock's high valuation relative to peers. Morgan Stanley had a $12 PT on $PLTR in February of 2024 and then a $20 PT by July. Additionally, more data was released today on the expansion of Palantir's work with the UK's NHS: "89 secondary care trusts are using the Federated Data Platform, aiming for 85% coverage by the end of March 2026." Palantir got the $500M NHS contract in late 2023.
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