What Happened?
Shares of infrastructure and defense services provider Parsons (NYSE: PSN) jumped 3.5% in the morning session after KeyBanc maintained its Overweight rating on the stock, even while lowering its price target.
The analyst firm adjusted its price target on Parsons to $76 from $81. This change followed the termination of a confidential contract and the company being edged out of a Federal Aviation Administration award. KeyBanc described these events as making for 'a disappointing year.' Despite the setbacks and the lower price target, the maintained Overweight rating suggested the firm still held a positive view of the stock's potential, which appeared to have encouraged investors.
After the initial pop the shares cooled down to $68.51, up 4.2% from previous close.
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What Is The Market Telling Us
Parsons’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 5.3% on the news that the company announced it secured a ten-year, $392 million single-award contract from a federal customer.
The agreement represented new work for the company, which provides technology solutions for the defense, intelligence, and critical infrastructure markets. The deal leverages Parsons' capabilities in biometrics and network engineering, combining hardware, software, and systems integration to support its client's mission. This win was particularly notable because it came weeks after the company lost a major contract with the FAA, an event that had previously pushed the stock down. This new contract helped reset the narrative for investors, shifting the focus from a prior loss to a significant new win.
Parsons is up 10.1% since the beginning of the year, but at $68.51 per share, it is still trading 29% below its 52-week high of $96.44 from January 2025. Investors who bought $1,000 worth of Parsons’s shares 5 years ago would now be looking at an investment worth $1,864.
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