Stifel reiterates Buy rating on Parsons stock, maintains $81 price target

Investing.com - Stifel maintained its Buy rating and $81.00 price target on Parsons Corp . (NYSE:PSN) following the company’s latest acquisition announcement. According to InvestingPro data, Parsons currently trades near its Fair Value, with a market capitalization of $7.78 billion and strong financial health metrics.

On Tuesday, Parsons announced it acquired Chesapeake Technology International (CTI) for $89 million. CTI operates as a pure-play defense contractor with exposures in Special Operations forces and INDOPACOM. The acquisition comes as Parsons demonstrates solid financial performance, with revenue growth of 16.61% and a moderate debt-to-equity ratio of 0.57.

The acquisition enhances capabilities for warfighters to "sense, evaluate, and deliver effects within the invisible battlespaces," according to Stifel analyst commentary.

This transaction aligns with Parsons’ broader strategy of acquiring companies with exposures in key growth areas that are accretive to margins.

Stifel believes this acquisition strategy will continue to be a positive driver for Parsons shares going forward.

In other recent news, Parsons Corporation has announced the acquisition of Chesapeake Technologies International (CTI) for $89 million. This strategic move is expected to bolster Parsons’ capabilities in electromagnetic warfare and all-domain solutions for the U.S. defense market. Additionally, Parsons has secured a $169.5 million contract from the U.S. Army Corps of Engineers to construct a new Ammonium Nitrate Solution Tank Farm at the Holston Army Ammunition Plant, further expanding its defense-related projects.

Parsons has also teamed up with IBM (NYSE:IBM) to modernize the U.S. air traffic control system, showcasing its ongoing commitment to enhancing national infrastructure. In the realm of financial analysis, Truist Securities has reiterated its Buy rating for Parsons, citing confidence in the company’s growth trajectory through 2025. However, TD Cowen has maintained a Hold rating following a reported reduction in Parsons’ sales, EBITDA, and free cash flow forecasts due to potential restructuring within the U.S. State Department.

Despite these challenges, Parsons’ collaboration with IBM and its acquisition of CTI underscore its strategic initiatives to strengthen its market position. The company’s recent projects and partnerships reflect its focus on expanding its technological and operational capabilities across various sectors.

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