Parsons secures contracts for Saudi airport project

Published 13/05/2025, 21:12
Parsons secures contracts for Saudi airport project

RIYADH - Parsons Corporation (NYSE: PSN), a $7 billion market cap engineering firm with strong revenue growth of 16.6% over the last twelve months, has been awarded two key contracts to support the development of the King Salman International Airport in Riyadh, Saudi Arabia, the company revealed today. The contracts, secured from the King Salman International Airport Development Company (KSIADC), owned by Saudi Arabia’s Public Investment Fund, cover the initial four years of the airport’s development plan. According to InvestingPro analysis, Parsons currently appears undervalued, with several positive indicators including a favorable PEG ratio of 0.53, suggesting strong growth potential relative to its current valuation.

The first contract involves Parsons acting as the Delivery Partner (DP) for the airport’s airfield assets, including runways, taxiways, aircraft parking, and air traffic control towers. The second contract focuses on landside infrastructure, such as roads, utilities, tunnels, bridges, rail networks, and landscaping. Parsons will oversee project management services across all phases, from early development to handover. The company maintains a solid financial position with moderate debt levels and a healthy current ratio of 1.29, as reported by InvestingPro, which offers comprehensive analysis and additional insights through its Pro Research Report, available for over 1,400 US stocks.

Carey Smith, Chair, President, and CEO of Parsons, expressed pride in expanding the company’s longstanding involvement in Saudi Arabia, which began in 1958 with the Dhahran Airport. Smith highlighted the company’s commitment to redefining airport experiences and establishing a premier logistics hub.

Marco Mejia, Acting CEO of KSIADC, underscored the strategic selection of Parsons as a DP, emphasizing the need for global expertise to realize their vision for a world-class airport emphasizing innovation, sustainability, and operational excellence.

The new airport, covering approximately 22 square miles, is expected to feature six parallel runways and handle up to 120 million passengers by 2030, with projections reaching 185 million passengers and 3.5 million tons of cargo by 2050.

Parsons, recognized for its global aviation solutions, has contributed to over 450 airports in 40 countries, including significant projects in the Middle East. The company’s regional presence spans more than 65 years, offering expertise in various sectors, including transportation and urban development. Despite recent market challenges, with the stock experiencing a 41.9% decline over the past six months, the company maintains strong fundamentals with an EBITDA of $566 million and a robust overall financial health score, as detailed in InvestingPro’s extensive financial metrics and analysis tools.

This announcement is based on a press release statement from Parsons Corporation.

In other recent news, Parsons Corporation reported its Q1 2025 earnings, where the company exceeded expectations for earnings per share (EPS) but missed revenue forecasts. Parsons posted an EPS of $0.78, surpassing the anticipated $0.74, while its revenue was $1.55 billion, falling short of the projected $1.62 billion. The earnings call highlighted a record total backlog of $9.1 billion, with 69% funded, indicating strong future demand. Jefferies analyst Sheila Kahyaoglu downgraded Parsons’ stock from Buy to Hold, lowering the price target to $65, citing a 2% organic revenue contraction in the first quarter and challenges related to a significant Confidential Program contract. Baird analysts also downgraded the stock to Neutral, reducing the price target to $69, and pointed out risks associated with a $725 million annual revenue contract under review by the Trump administration. Despite these downgrades, Baird remains optimistic about Parsons’ competitive position in its Federal and Infrastructure segments. Parsons maintains a positive outlook for 2025, expecting total revenue between $7.0 billion and $7.5 billion, with plans to pursue 2-3 acquisitions this year.

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