BofA Securities lowered its price target on Parsons (NYSE: PSN) to $90 from $95 while maintaining a Buy rating, following the company's loss of a major FAA contract.

The firm said Parsons was beaten out by Peraton for the Brand New Air Traffic Control System (BNATCS) integration contract, a result that surprised many observers. BofA noted that the FAA cited Peraton's software and digital capabilities as a key differentiator, consistent with a broader “software-first” trend in government procurement.

Peraton's bid totaled $1.5 billion, and BofA highlighted comments from FAA Administrator Bryan Bedford during a December 16 House subcommittee hearing indicating that a $200 million “Trump discount” could pressure early-year profitability on the contract. Bedford also suggested there could be opportunities for Parsons to participate as a partner under existing contract vehicles.

BofA said the stock's negative reaction appeared overdone, arguing that Parsons' fundamentals remained solid, particularly in defense and critical infrastructure. However, the firm acknowledged near-term valuation pressure and lowered its price target accordingly. BofA also trimmed adjusted EPS estimates in the out-years to reflect a slower appropriations environment following the government shutdown, forecasting adjusted EPS of $3.25 for 2025, $3.40 for 2026, and $3.85 for 2027.