Parsons Corp (PSN) Stock Forecast & Price Target

Parsons Corp is projected to experience margin expansion, with management targeting an improvement of 30 basis points this year and an overall enhancement of 100-150 basis points over the next three years driven by strategic initiatives and contracts. The company is anticipated to outperform industry organic growth rates, supported by strong demand for Critical Infrastructure bookings, better hiring trends, and alignment with defense and intelligence priorities. Furthermore, significant opportunities such as the potential $800 million Joint Cyber Threat Hunt Kit award may contribute to improved federal margins, alongside positive growth trends in urban development across key regions.

The negative outlook on Parsons Corp's stock is primarily driven by a revised FY26E target EBITDA multiple reduction due to anticipated challenges in federal budget allocations, which could adversely affect the company's Federal Solutions segment. Geopolitical tensions, particularly related to operations in the Middle East, and heightened competition for skilled labor may increase operational costs and limit project execution capabilities. Additionally, potential changes in government procurement practices and a slowing U.S. economy may further constrain investments in critical infrastructure, thereby impacting Parsons' growth prospects.