Stifel has modestly lowered its price target for Parsons Corp. to $89.00 from $90.00 and reaffirmed a Buy rating on the shares, leaving the target comfortably above the current market quote of $61.47. The adjustment follows Parsons' fourth-quarter results and initial 2026 revenue guidance, both of which disappointed investors.
The analyst house linked its revision to larger-than-expected, but described as transitory, headwinds within Parsons' Federal Solutions segment. Those operational pressures coincided with a quarter in which the company missed both top- and bottom-line forecasts.
Parsons reported fourth-quarter 2025 earnings per share of $0.75, below the consensus expectation of $0.7962. Revenue for the period came in at $1.6 billion versus a forecast of $1.68 billion. In response to the subdued initial revenue outlook for 2026, the company's stock dropped about 15% on the trading day following the announcement.
Short-term market reaction has been pronounced. The shares have declined roughly 10.77% over the past week and about 24.7% over the last six months, reflecting investor reassessment of the company's near-term trajectory. Despite this pullback, valuations based on available fair-value assessments indicate the stock may be trading below its intrinsic value.
Stifel retained a positive stance on Parsons' longer-term growth verticals, saying those drivers should become more visible later in the year. The firm also characterized investor concern over potential AI and software-driven disruption to the government services space as "overblown," and urged investors to concentrate on the secular opportunity to modernize government technology rather than overreacting to fears around accelerated technological adoption.
Not all broker responses were identical. KeyBanc Capital Markets cut its price target for Parsons from $80.00 to $73.00 while maintaining an Overweight rating, and described the past year as difficult with performance falling short of expectations. These revisions highlight differing views among analysts: while some trimmed their near-term financial expectations, they have not abandoned constructive ratings on the stock.
Context for investors
The share-price move has been driven by a combination of a weak quarterly performance, cautious initial revenue guidance for 2026 and broader investor unease about technology-driven changes in government contracting. Stifel's incremental target reduction and continued Buy rating underscore a view that current operational setbacks are temporary and that longer-term modernization demand remains intact.
At the same time, the quarter's missed EPS and revenue benchmarks, together with the lowered targets from multiple analysts, are material signals for stakeholders monitoring Parsons' near-term financial health and market positioning.
Data points cited in this report reflect company-stated results, analyst target revisions and market-movement figures released in conjunction with the fourth-quarter 2025 report and subsequent commentary.