William Blair upgrades Parsons with contract risk now priced in

William Blair analyst Louie DiPalma upgraded Parsons (PSN) to Outperform from Market Perform without a price target ahead of the company’s earnings report on February 19. The firm continues to believe Parsons’ large confidential customer contract will pose a revenue headwind for this year following Executive Orders 14163 and 14169. However, with the stock down 23% since Blair’s January downgrade and taking into account Parsons’s extension announcement, the firm thinks the revenue headwind is now generally priced into the stock. The analyst sees share upside of greater than 10% over the next year as industry sentiment improves and Parsons’ EBITDA continue to grow. Since the executive orders and the downgrade, there have been positive developments, Blair contends.