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Investing.com - Raymond (NSE:RYMD) James upgraded Parsons Corp . (NYSE:PSN), a $7.95 billion market cap defense and infrastructure company with 16.6% revenue growth, from Market Perform to Strong Buy and established a $90.00 price target. According to InvestingPro analysis, the stock appears slightly undervalued at current levels.
The upgrade comes as Parsons shares have declined approximately 20% year-to-date, underperforming the S&P 500’s 6% gain during the same period, with multiple compression of about one turn.
Raymond James believes Parsons’ estimates are now de-risked and sees several growth opportunities for the company, including potential contracts with the Federal Aviation Administration, missile defense initiatives (Golden Dome), and nuclear projects.
The research firm also expressed optimism that an easing war-tempo could create rebuilding opportunities while allowing Parsons to maintain growth in its core and non-confidential contracts at low double-digit to mid-teen rates.
The $90 price target is based on 15 times Raymond James’ calendar year 2026 EV/EBITDA estimate, which the firm notes is in line with Parsons’ historical trading range.
In other recent news, Parsons Corporation announced its acquisition of Chesapeake Technology International (CTI) for $89 million, a move that strengthens its position in the U.S. defense market. This acquisition is expected to be accretive to Parsons’ fiscal year revenue growth rate, adjusted EBITDA margin, and adjusted diluted earnings per share. Stifel has reiterated its Buy rating on Parsons, maintaining an $81 price target following this acquisition. Additionally, Truist Securities has also reiterated its Buy rating, citing confidence in Parsons’ growth trajectory through 2025 and beyond.
In a separate development, Parsons has teamed up with IBM (NYSE:IBM) to modernize the U.S. air traffic control system, aiming to overhaul the Federal Aviation Administration’s National Airspace System. Furthermore, Parsons secured a $169.5 million contract from the United States Army Corps of Engineers to build a new Ammonium Nitrate Solution Tank Farm at the Holston Army Ammunition Plant. This project is part of the U.S. Army’s initiative to modernize its organic industrial base.
These recent developments reflect Parsons’ strategic growth in both defense and infrastructure sectors, with significant contracts and partnerships underscoring its capabilities. The company’s ongoing projects and acquisitions indicate a focused approach toward enhancing its market position and expanding its service offerings.
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