Parsons Stock (PSN) 21% Selloff on $12.5B Project Loss 'Overdone' — BofA

Bank of America (BofA) (BAC) has argued that the 21.09% selloff seen in defense and intelligence contractor Parsons' (PSN) shares on December 5 was "overdone."Claim 70% Off TipRanks This Holiday SeasonUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential The plunge came after Parsons lost the bid for the $12.5 billion U.S. air traffic control system renovation project to Peraton, a rival private national security firm. The U.S. Federal Aviation Administration (FAA) picked Peraton over a joint bid from Parsons and IBM (IBM), citing the former's software and digital capabilities as a key differentiator. BofA Says Parsons' Fundamentals Remain Strong In her end-of-year assessment of Parsons, BofA Securities analyst Mariana Perez Mora noted that investor reaction was excessive. Mora pointed out that Bryan Bedford, the FAA Administrator, implied that there could be opportunities for Parsons to participate as a partner under existing contract vehicles. The five-star analyst trimmed her PSN price target by 5% to $90 per share, pointing to short-term pressure on Parsons' stock valuation. However, the analyst emphasized that the defense company's fundamentals remain strong, especially in two areas: defense work for government and military clients and projects that support essential national infrastructure such as transportation, energy, and cyber systems. Previously, Stifel analyst Jonathan Siegmann similarly noted that the market "overreacted" to the contract loss. Siegmann trimmed his PSN price target from $94 to $90 but stuck to his Buy rating on the stock. Parsons Secures Fresh Defense Deals Since losing that contract, Parsons has snapped up other deals. It recently secured a deal worth up to $151 billion from the Missile Defense Agency under the U.S. Department of Defense's scalable homeland innovative enterprise layered defense (SHIELD) program. Parsons also recently clinched a new $88 million award from the U.S. Air Force to procure and configure advanced equipment to support the U.S. Europe/Africa Command's Air Base Air Defense (ABAD) mission at the Ramstein Air Base in Germany. What Is the Target Price for PSN Stock? On Wall Street, Parsons' shares continue to carry a Moderate Buy consensus rating from analysts. This is based on 10 Buys and four Holds issued by 14 analysts over the past three months. At $84.45, the average PSN price target implies about 37% growth potential from current trading levels.