Jefferies analyst Sheila Kahyaoglu downgraded the rating on Parsons (PSN – Research Report) to a Hold today, setting a price target of $65.00.
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Sheila Kahyaoglu has given her Hold rating due to a combination of factors impacting Parsons’ financial outlook. The company is experiencing a decline in revenues related to its Confidential Program (CP), which is expected to decrease significantly by 2026. This reduction presents a substantial challenge, as it contributes to an anticipated flat year-over-year organic growth, despite commendable growth in other areas of the business.
Moreover, while Parsons has demonstrated strong management and impressive organic growth outside of the CP, the uncertainty surrounding the CP’s future viability casts a shadow over the company’s overall growth trajectory. The core business is expected to achieve a 15% organic growth rate in 2025, but the unwinding of the CP will create a headwind that offsets these gains. Consequently, the stock’s valuation remains in line with market averages, justifying the Hold rating with a price target of $65.
In another report released on May 1, Robert W. Baird also downgraded the stock to a Hold with a $69.00 price target.