Yes he is a bit underrated among all the star players, I also don't no why is like that but it could be that the club he is playing for is the reason why he is not that noticeable because if Chelsea were to be very competitive on this premier League they would have seen more of Palmer but how can a player be ranked higher when they are not consistent, so inability for a club to be productive can have a negative effects on a player, so like I already mentioned if Palmer find himself on Manchester City his performance will even be better compare to this because the young star is very good and I think Chelsea will always look forward in trying to renew his contract.
Palmer is now starting to mature and he is in the right team because he gets regular playing time. Now Palmer has become a valuable asset for Chelsea and of course the management will protect him with a long-term contract. Previously, the talent scouts at Manchester City had known the resources he had, only Manchester City could not provide space because there were many more quality players in the team so they sold him to Chelsea. Even if Palmer was still at Manchester City now, I am sure he would not develop because of the lack of playing minutes which affected his mentality and performance.
You have a point because if we reason the whole situation of Palmer on the aspect you are talking about, leaving Manchester City was the best for him because Manchester City is like a club were all the players use to be very competitive among themselves in other to have more chances and noticeable to people, which would have affected the growth of Palmer because I realized that his sudden performance was when he left the club because during that time he was still playing there he was not this good probably because he is not always given much time to perform but since he joined Chelsea he has the time to display all the hidden performance he had, so actually your point is good.