Parsons Corp (PSN) Stock Forecast & Price Target

Parsons Corp is positioned for favorable growth, with management targeting a 30 basis point margin improvement this year and a potential expansion of 100-150 basis points over the next three years, driven by strong demand in the Critical Infrastructure segment and enhanced hiring trends. The company's alignment with U.S. defense and intelligence priorities within the Federal Solutions segment further supports the positive outlook, particularly with upcoming potential awards like the $800 million Joint Cyber Threat Hunt Kit. Additionally, the robust urban development growth in the Middle East, projected in the mid-teens this year, reinforces the company’s capability to capitalize on expanding market opportunities.

Parsons Corp's outlook is negatively affected by a revised fiscal year 2026 EBITDA multiple, reducing expectations from 17.6x to 15.8x, indicating concerns over profitability. The company faces several risks, including potential declines in federal budgets, geopolitical tensions impacting Middle Eastern operations, and heightened competition for skilled labor, which may lead to increased costs and hiring challenges. Additionally, anticipated delays in government clearance processes and potential changes in procurement practices could further hinder Parsons' ability to effectively manage contracts and achieve growth in the defense and infrastructure sectors.