Parsons Stock: Institutional Confidence and Analyst Targets Signal Potential Rebound

Shares of defense and infrastructure specialist Parsons Corporation have faced significant pressure this year, declining approximately 30% in value. Currently trading around $63.35, the stock is hovering near the lower end of its 52-week range of $54.56 to $99.04. However, recent activity from Wall Street analysts and major investment funds suggests a growing belief that the equity may be poised for a recovery.

A notable vote of confidence came from Citigroup on December 12, 2025. The bank initiated coverage on Parsons with a "Buy" rating. Analyst John Godyn established a price target of $86.00 per share, implying a potential upside of roughly 35% from current levels.

This bullish stance aligns with the broader consensus among market researchers. The median price target from eleven analysts over the past six months stands at $82.00. Other recent assessments reinforce this perspective:
* UBS: $107 price target (November 19, 2025)
* Truist Securities: $90 price target (December 8, 2025)
* Keybanc Capital Markets: $81 price target (December 8, 2025)

Currently, 71.4% of covering banks rate the stock as a "Buy," while 28.6% recommend "Hold."

Institutional Investors Increase Holdings Amid Weakness

Contrary to the stock's negative price trend this year, large institutional funds have been accumulating shares. Recent 13F filings for the third quarter of 2025 reveal that major players added to their positions at lower valuations.

Kettle Hill Capital Management increased its stake by 278,919 shares. This purchase was valued at approximately $24.18 million during the quarter. The fund now holds 373,180 shares worth about $30.94 million, making Parsons its second-largest portfolio holding.

Should investors sell immediately? Or is it worth buying Parsons?

Frontier Capital Management also substantially expanded its exposure in the second quarter, boosting its stake by 568.4% to over 510,000 shares. In total, institutional investors hold about 98.02% of the company's free float, demonstrating professional conviction despite the share price decline.

Financial Performance Presents a Contrast

The divergence between the stock price and underlying business metrics is evident in the latest quarterly results. For Q3 2025, Parsons reported revenue of $1.62 billion, a year-over-year decrease of 10.4%. Profitability, however, showed improvement.

The company's reported earnings per share (EPS) came in at $0.86, surpassing expectations of $0.74 by $0.12. This indicates enhancements in operational efficiency, even as top-line revenue faced pressure.

Parsons carries a market capitalization of approximately $6.63 billion and trades at a price-to-earnings (P/E) ratio of 18.03. A discounted cash flow analysis conducted by Simply Wall St suggests a fair value of $82.94 per share, pointing to a potential undervaluation of around 23.6%.

The combination of aggressive analyst price targets and demonstrated commitment from major funds is drawing attention to whether the stock can close the gap to its perceived fundamental value. Upcoming quarterly earnings will serve as a crucial test for this thesis.