Options traders are increasingly betting on a post-earnings rally in Palantir Technologies (PLTR), which is scheduled to report its financials after market close on Nov. 2. Consensus is for the artificial intelligence (AI)-driven data analytics company to post $0.33 in earnings per share (EPS) for its third financial quarter, which would represent year-over-year growth of about 83%.
At the time of writing, Palantir stock is up about 80% versus its YTD low.
Options Sentiment Remains Bullish for Palantir Stock
PLTR stock has recently tumbled below its 20-day moving average (MA), indicating bears have taken back control of the near term.
Still, traders are increasingly betting on call options, a setup broadly recognized in the derivatives market as bullish. The put-to-call ratio on contracts expiring Nov. 6 sits at 0.51x as of writing.
According to the latest data from Barchart, the upper price on those options contracts is set at about $214 currently, signaling potential for a more than 10% surge in Palantir through the end of next week.
That said, company executives have predominantly unloaded shares in the trailing six months, which warrants some caution in playing Palantir at current levels.
JPMorgan Initiates PLTR Shares with an ‘Overweight’ Rating
JPMorgan analyst Brian Essex is confident that Palantir shares are not out of steam just yet. In a research note, Essex assumed coverage of the Nasdaq-listed firm with an “Overweight” rating, saying it has “uniquely profitable hyper-growth fundamentals, with potential for substantial disruptive upside within its primary market segments.”
The analyst assigned a $262 price objective to PLTR, indicating potential upside of more than 30% from current levels. He expects the company to benefit as demand for AI Sovereignty continues to grow.
However, the stock is currently trading at 154x earnings, so it’s not an inexpensive name to own.
What’s the Consensus Rating on Palantir?
While not nearly as bullish as JPM, other Wall Street firms also favor exposure to PLTR shares for the long term.
The consensus rating on Palantir sits at “Moderate Buy,” with the mean price target of about $213 indicating potential upside of about 10% from here.
On the date of publication, Wajeeh Khan did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.