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Investing.com - Truist Securities has reiterated its Buy rating on Parsons Corp . (NYSE:PSN) following an optimistic assessment of the company’s growth trajectory. The company, which has demonstrated strong revenue growth of 16.6% over the last twelve months and maintains a GREAT financial health score according to InvestingPro, appears to be trading below its Fair Value.
The firm expressed increased confidence in Parsons’ 2025 exit rate organic growth, which implies a potential beat/raise cadence extending into 2026. According to Truist, Parsons’ core organic growth, excluding a confidential contract, should accelerate to mid-to-high teens by the end of 2025. With an EBITDA of $566 million in the last twelve months and a PEG ratio of 0.56, the company’s valuation appears attractive relative to its growth prospects.
This acceleration would position 2026 consensus estimates as relatively conservative, with current projections modeling just 4% core organic growth in 2026 excluding the confidential contract. Truist anticipates Parsons would still offer initial guidance assuming low to mid-single digit core organic growth, but estimates could move higher throughout 2026.
Parsons currently trades at a 27% premium to the government services peer group, compared to its three-year average premium of 20%. The stock’s valuation reflects its position in the market.
Truist believes Parsons continues to demonstrate superior organic growth prospects with its unique mix of Federal Solutions offerings and Critical Infrastructure segment, supporting the maintained Buy rating.
In other recent news, Parsons Corporation has announced several significant developments. The company secured a $169.5 million contract from the United States Army Corps of Engineers to construct a new Ammonium Nitrate Solution Tank Farm at the Holston Army Ammunition Plant. This contract is part of the Army’s broader initiative to modernize its industrial base. Additionally, Parsons is partnering with IBM (NYSE:IBM) to modernize the U.S. air traffic control system, a move that aims to enhance the Federal Aviation Administration’s capabilities with cutting-edge technologies.
In terms of financial guidance, Parsons recently filed a report indicating a reduction in its C25 sales, EBITDA, and free cash flow forecasts by over 10%, primarily due to uncertainties related to a confidential contract with the U.S. State Department. Analysts at TD Cowen maintained a Hold rating on Parsons’ stock, noting that the significant forecast reduction might be excessive. Meanwhile, Benchmark analysts reaffirmed their Buy rating despite the guidance cut, maintaining a price target of $90.00.
Raymond (NSE:RYMD) James analysts kept a Market Perform rating, citing the revised outlook that excludes the confidential contract and projects a 2025 growth of -1.6%. They see potential for revenue acceleration in 2026, with a reduction in headwinds and growth in core business areas. These recent developments reflect Parsons’ ongoing strategic initiatives and the challenges it faces due to changes in government contracts.
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