Jefferies says CARE elimination cancels ‘fifth step’ in Parsons program

Jefferies analyst Sheila Kahyaoglu notes that a Congressional Notification this week from the State Department confirmed that the Coordinator for Afghan Relocation Efforts, or CARE, office will be officially terminated, which the firm believes to be the partner overseeing the “fifth step” in Parsons (PSN) Confidential program. Given the firm’s understanding that this would effectively cancel the “fifth step” of confidential work currently being conducted by a partner, the firm argues that this news would suggest that the best case scenario for Parsons’ own work would be for the program to continue at 80% scope. Given Senator Rubio’s testimony that U.S. humanitarian work internationally will continue, but without a formal office overseeing the process, the firm believes there could be significant delays and likely lower volumes, even if Parsons’ work were to continue. Jefferies has a Hold rating and $70 price target on Parsons shares.