P&G Outperforms Palantir 2026 -2029

HARVEST REPORT

Discipline in Practice

PLTR vs. PG — A Three-Year Positioning Note - P&G Wins

May 7, 2026

A Word on Temperament

Earnings are printing beyond expectation, markets are trading at all-time highs, and the natural instinct is to buy big tech. But the market rewards those with cool heads and a steady hand on the helm — and right now is a very good time to force yourself into selling today’s winners and buying stocks that have lagged but are priced fairly, rather than optimistically.

PLTR — Palantir Technologies

Palantir enters our three-year window at roughly $133.69, already off ~38% from its November 2025 peak of $207.52, yet still trading at a price-to-sales multiple near 86x — a level for which there is essentially no historical precedent that has ended well over a multi-year horizon. In a normal economic environment, our base case assumes a continued, gradual de-rating from extreme multiples toward something closer to large-cap software comparables, partially offset by 25–30% revenue growth from AIP and government contracts; this maps to a roughly $170–$185 price in three years and a total return of approximately +27% to +38% (≈ 8–11% annualized), in line with the consensus $194 target.

In a bear-market scenario, multiple compression is the dominant force: a re-rating from ~86x sales to ~25x, even with revenue compounding at 20%, produces a peak-to-trough drawdown in the −55% to −65% range (i.e., $55–$60), with a partial three-year recovery to $90–$110, leaving total return at roughly −20% to −35%. In a bull market — where the AI capex cycle accelerates, government and commercial pipelines convert without margin compression, and multiples hold near current levels — PLTR could reach $260–$320, a +95% to +140% three-year total return. The asymmetry is real but it is two-sided: the upside is exciting, the downside is structural, and the position size should respect that.

PG — Procter & Gamble

Procter & Gamble enters the same window at roughly $148.04, trading at a forward P/E of ~21.4x — close to its five-year median and a meaningful discount to the broader S&P 500 — with a 2.9% yield just raised for the 70th consecutive year. In a normal economic environment, our base case assumes 4–5% organic revenue growth, modest margin expansion from productivity initiatives, and a return to the long-run trading range of 22–24x earnings; this maps to a roughly $185–$200 price in three years, plus ~$13 in cumulative dividends, for a total return of approximately +35% to +45% (≈ 11–13% annualized) — comparable in magnitude to PLTR's base case but with far less variance.

In a bear-market scenario, the historical record is the anchor: PG fell ~14% in 2008 versus a much deeper market drawdown and was roughly flat in 2009; we model a peak-to-trough drawdown in the −15% to −20% range (i.e., a low near $118–$125), with a near-full recovery and dividend reinvestment lifting three-year total return to a roughly flat-to-+8% outcome — a defensive cushion when capital preservation matters most. In a bull-market scenario, PG meaningfully lags a risk-on tape but still compounds at high single digits via earnings growth and the dividend; we project $175–$190 plus dividends, or +25% to +35% over three years. The case for PG is not that it wins in the bull market — it does not — but that it shrinks the variance of the overall portfolio while still earning a respectable total return across all three regimes.

RECOMMENDATION

Trim PLTR by 50%.

Add to PG with the proceeds.

This is a measured rebalancing — not a complete shift in posture. We are reducing concentration in a position whose downside has expanded with its multiple, and buying a holding whose downside is well-bounded by 70 years of dividend discipline. Maintain core PLTR exposure to preserve participation if the bull case continues; let the proceeds of the trim, plus any new contributions, flow into PG until the targeted weights are restored. Discipline is not the absence of conviction — it is the refusal to let conviction become concentration at the wrong price.

Disclosures

Harvest Portfolio Management is a registered investment adviser. This commentary is prepared for client discussion and is not a solicitation to buy or sell any security. Forward-looking scenarios reflect Harvest assumptions as of the report date and are subject to change. Past performance is not indicative of future results. All projections are estimates and actual outcomes may differ materially. Position sizing should reflect each client's Investment Policy Statement, liquidity needs, and tax situation.