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On Tuesday, Raymond (NSE:RYMD) James analysts maintained their Market Perform rating for Parsons Corp . (NYSE: NYSE:PSN), which has seen its stock decline by 33% over the past six months. According to InvestingPro data, three analysts have recently revised their earnings expectations downward for the upcoming period. The decision follows Parsons’ announcement of a revised outlook for the year, which excludes a confidential contract due to a reorganization within the State Department.
Parsons’ updated forecast anticipates a 2025 growth of -1.6%, or approximately 11% growth when excluding the confidential contract. Organic growth is projected at -4.1%. Despite these projections, InvestingPro’s analysis indicates the company maintains a strong financial health score and is currently trading below its Fair Value. The analysts expect that street models will adjust to reflect these changes, potentially leading to a more favorable narrative and stabilization in the stock.
Despite the current challenges, Raymond James analysts see potential for revenue acceleration in 2026. They attribute this to a reduction in a $700 million headwind to around $300 million, along with mid-teens growth in the core business, resulting in an estimated organic growth of nearly 9%.
Parsons is considered well-positioned in key spending areas, with opportunities in sectors such as the Federal Aviation Administration, border security, and the Sentinel program. These areas could enhance the company’s core operations in Cyber, Space, and Critical Infrastructure domains.
The analysts cited a difficult environment for the sector as a reason for maintaining the Market Perform rating, along with expectations of market volatility in the coming months.
In other recent news, Parsons Corporation revised its 2025 financial guidance due to uncertainties surrounding a confidential contract with the Department of State. The company now expects total revenue for 2025 to range between $6.45 billion and $6.65 billion, down from the previous estimate of $7 billion to $7.5 billion. This adjustment reflects the removal of the anticipated financial impact of the contract, which has led to a decrease in expected adjusted EBITDA as well. In a separate development, Parsons has been selected as one of the lead consultants for the Austin-Bergstrom International Airport expansion project, which aims to modernize and enhance the airport over the next five to seven years. Additionally, Parsons has secured 30 projects in Qatar, valued at up to $97 billion, contributing to its growth and supporting American employment in the engineering sector. Meanwhile, William Blair analysts maintained a Market Perform rating for Parsons, highlighting concerns about the removal of the confidential contract and the need for clarity on government procurement trends. These developments come amid broader scrutiny from the U.S. government on federal contract spending, as reported by the Wall Street Journal. Parsons, along with other tech firms, is facing increased pressure to justify federal contracts and explore cost-cutting measures.
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