Citi cuts Palantir price target to $210 from $260, citing software multiple compression despite raising estimates ahead of Q1 2026 report.

Citi lowered its price target on Palantir to $210 from $260 while maintaining a Buy rating. The analyst raised Palantir estimates ahead of the Q1 2026 report, signaling fundamentals remain intact even as valuations across the software sector reset.

The price cut reflects sector-wide valuation pressure, not weakening business fundamentals. Adobe shares are down 32% year to date, Salesforce stock is off 32%, and ServiceNow shares have dropped 41% year to date. Palantir itself is down 19% year to date despite operating beats and trades at a forward P/E ratio of 111x compared with Adobe's forward P/E ratio of 10x.

Palantir delivered Q4 2025 revenue of $1.406 billion, up 70% year over year, with U.S. commercial revenue jumping 137% year over year to $507 million. FY 2026 guidance calls for revenue of $7.182 to $7.198 billion, roughly 61% year over year growth, with adjusted free cash flow of $3.925 to $4.125 billion.

The Q1 report is due May 4 after the close.