Investing.com -- Parsons Corp. (NYSE:PSN) stock fell 15% Friday after the U.S. Federal Aviation Administration (FAA) and Department of Transportation (DOT) awarded the Brand New Air Traffic Control System (BNATCS) contract to rival Peraton instead of Parsons.
The loss of the approximately $12.5 billion contract represents a significant setback for Parsons, which had been widely considered a frontrunner for the prime integrator role on the project to modernize America’s air traffic control infrastructure.
Raymond James analyst Brian Gesuale downgraded Parsons from Strong Buy to Market Perform following the news. "In our view, Peraton’s award will be a major surprise to investors, dents the psyche of the stock, and eliminates significant organic upside to numbers in 2026/2027," Gesuale noted.
The analyst further explained that Parsons shares had reached the highest multiple among peers, trading at a 35% premium to the broader group, largely reflecting market expectations of a contract win. Gesuale believes this premium "could be cut in half or more" as catalysts become less significant and timing more uncertain.
In a statement, Peraton Chairman, President, and CEO Steve Schorer called the award "a historic opportunity to fundamentally transform America’s air traffic control system," pledging to deliver a more secure and reliable system.
Despite the setback, Raymond James maintains that Parsons’ longer-term market positioning remains intact, with expectations for mid-single-digit-plus organic growth excluding confidential projects. The company still has potential upside from missile defense, border security, and Middle East infrastructure projects, though these now represent medium-term rather than near-term growth drivers.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
