Jefferies Lowers Palantir Target to $13, Warns of 10% Downside
Jefferies cut its Palantir price target by 13% to $13 and reaffirmed a Hold rating, warning that valuation and slowing government contract growth could drive another 10% share decline. The firm highlighted a 25% rally since mid-2025 has outpaced fundamentals and flagged weakening margins on U.S. Defense deals.
1. Jefferies Downgrades Price Target
Jefferies reduced its price target on Palantir from $15 to $13, reflecting a 13% cut, and maintained a Hold rating on concerns that current share levels outpace the company’s fundamentals.
2. Valuation and Growth Concerns
Analysts pointed to a 25% rally since mid-2025 that has left Palantir trading at 30× forward sales, above peers, and cautioned that slowing government contract wins could pressure future revenue.
3. Defense Contract Margins Slowing
The firm highlighted weakening margins on U.S. Defense deals, noting that incremental contracts are now averaging 15% below historical levels and could compress overall profitability.
4. Potential Downside Risks
Jefferies forecasts a further 10% share drop if Palantir fails to secure larger commercial agreements by Q3, suggesting investors temper expectations until evidence of sustainable growth appears.