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Investing.com - KeyBanc raised its price target on Parsons Corp . (NYSE:PSN) to $82.00 from $73.00 on Wednesday, while maintaining an Overweight rating on the stock. The company, currently trading at $73.51 with a market capitalization of $7.85 billion, is trading slightly below its Fair Value according to InvestingPro analysis.
The higher price target reflects KeyBanc’s adjustment to a higher target multiple following Parsons’ guidance reset that excludes a confidential contract.
KeyBanc expressed caution regarding the pace and timing of federal contract awards, including the FAA radar modernization project, despite viewing clarity on the confidential program as a positive development.
The firm noted that Parsons’ Critical Infrastructure (CI) segment continues on a growth trajectory, supported by strong exposure to the Middle East and a growing domestic base. This growth aligns with the company’s impressive 16.61% year-over-year revenue growth and healthy 21.21% gross margin. InvestingPro analysis reveals 7 additional key insights about Parsons’ financial health and growth prospects.
KeyBanc expects an upward trend in margins from the core business as legacy projects in the CI segment reach completion. The company maintains a moderate debt level and has demonstrated strong returns over the past five years.
In other recent news, Parsons Corporation has announced the acquisition of Chesapeake Technology International (CTI) for $89 million. This acquisition is expected to enhance Parsons’ capabilities in electromagnetic warfare and all-domain solutions within the U.S. defense market. CTI’s integration is anticipated to be accretive to Parsons’ fiscal year revenue growth rate and adjusted EBITDA margin. In addition, Raymond (NSE:RYMD) James has upgraded Parsons’ stock rating to Strong Buy, setting a price target of $90, citing de-risked estimates and growth opportunities in various sectors, including potential contracts with the Federal Aviation Administration and missile defense initiatives. Stifel has also reiterated its Buy rating on Parsons, maintaining an $81 price target, expressing confidence in the company’s acquisition strategy. Furthermore, Parsons has been appointed as the Project Management Consultant for the Dubai Metro Blue Line project, a five-year contract that includes comprehensive project management services. The company’s work on the I-270 North Design-Build Project has also received the Engineering Excellence Award from the American Council of Engineering Companies of Missouri, highlighting its commitment to improving transportation infrastructure.
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