Stifel Upgrades Parsons Corp. (PSN) to Buy

Stifel analyst Joseph DeNardi upgraded Parsons Corp. (NYSE: PSN) from Hold to Buy with a price target of $45.00 (from $44.00).

The analyst comments "Parsons reported stronger than expected 4Q19 results on stronger sales and margins. The company's initial 2020 guidance was slightly softer than we were modeling largely due to a greater headwind at the Infrastructure segment associated with the runoff of lower margin contracts. This was partially offset by a stronger outlook for the Federal Solutions business with implied organic growth of ~8% in 2020, an acceleration from the 6% organic growth in 2019. Our sum-of-the-parts methodology values Parsons' Federal business at 13x EBITDA, inline with the peer-group average, and the Infrastructure business at 10x EBITDA, below the peer group average to reflect lower growth. Parsons ended the year with <0.5x net debt/EBITDA giving it one of the best balance sheets in the industry which leads us to view Parsons' EBITDA as being understated relative to its balance sheet capacity for M&A."

For an analyst ratings summary and ratings history on Parsons Corp. click here. For more ratings news on Parsons Corp. click here.

Shares of Parsons Corp. closed at $33.55 yesterday.

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