First Read Parsons Corp Charge and guidance cut overshadow strong bookings

研报英文原文证据摘录

First Read Parsons Corp Charge and guidance cut overshadow strong bookings

Forecast returns

Forecast price appreciation 8.0%

Forecast dividend yield 0.0%

Forecast stock return 8.0%

Market return assumption 9.3%

Forecast excess return -1.3%

Company Description

PSN provides technology-driven solutions in the defense, intelligence, and critical

infrastructure markets. The Federal Solutions segment supports various agencies across the

US government with a wide range of solutions, including offensive and defensive cyber, air

and missile defense, geospatial and signals intelligence, and critical infrastructure protection.

The Critical Infrastructure segment provides design, engineering, and program management

services for physical and digital infrastructure projects, primarily for customers in North

America and the Middle East.

Valuation Method and Risk Statement

Our 12-month price target is based on a target 16.2X EV/EBITDA multiple. We now target

parity to history vs. 0.5SD premium previously on slower growth.

Key risks: Core business growth - US defense and intelligence budgets are growing, but

demand is stronger for hardware relative to services, which is where PSN is more exposed.

There is risk Federal Solutions may undergrow budgets, or see more cancellations from

changing priorities. Within Critical Infrastructure, there is risk to our growth estimates if

investment in infrastructure does not materialize as expected, perhaps due to an economic

slowdown or less funding from sources such as IIJA. Margin expansion - we assume YTD

improvements in Critical Infrastructure margins are sustainable as PSN exits at-risk

construction. If this assumption proves wrong, or if the rate of margin expansion we model in