Increase in Parsons' Shares by 4% today
In a positive research note published before market open, Tobey Sommer of Truist Securities reiterated his buy recommendation for Parsons Corporation (NYSE: PAR), a leading provider of technology-driven solutions in the government services sector.
Sommer's optimistic view is primarily driven by Parsons' expected organic sales growth in 2025 and 2026. He predicts that Parsons' organic sales will grow at mid-to-high teen percentage rates in 2025 compared to the previous year, marking a significant increase from the three-year average premium of 20%. However, for 2026, he expects growth to continue but at a slower rate, forecasting only about 4% organic growth.
This positive outlook is backed by Parsons' recent successes. The company has secured several contract wins so far in 2025, contributing to a bullish outlook for its future. Notably, Parsons recently announced plans to team up with IBM to build a next-generation air traffic control system for the government, a move that is expected to further boost its prospects.
President Trump's administration has also stated that Parsons scored construction contracts abroad in Qatar, further expanding its global footprint.
The analyst believes Parsons deserves a higher valuation due to its unique blend of federal government contracting and critical infrastructure work. Despite trading 27% higher than its peer group in government services, which is only slightly above the three-year average premium of 20%, Sommer considers Parsons to be inexpensive on its current valuations.
On Thursday, the S&P 500 index gained 0.8%, with Parsons outperforming. The company's share price improved by 4%, reflecting the market's positive response to Sommer's note.
However, if Sommer's forecast for 2026 revenue growth becomes reality, some investors may be disappointed and potentially trade the stock accordingly. Nonetheless, Sommer's latest Parsons take is based on the company's organic sales growth this year, offering a promising outlook for the company's future.
- The analyst, Sommer, believes that Parsons Corporation's unique mix of federal government contracting, critical infrastructure work, and technology-driven solutions make it an attractive investment in the finance sector.
- Given Parsons' expected mid-to-high teen percentage growth in organic sales for 2025 and the company's recent contract wins and international successes, investors might consider allocating their money towards Parsons as part of their investing strategy.
- Looking ahead, as technology continues to evolve, investments in companies like Parsons, which are poised to build next-generation systems like a next-generation air traffic control system, could prove beneficial for those focused on long-term finance goals.
