Parsons Corp (PSN) saw its stock price plummet by 5.06% in pre-market trading on Thursday, following a downgrade by Baird from Outperform to Neutral. The significant drop highlights the impact of analyst ratings on investor sentiment and stock performance.

Baird not only lowered its rating on Parsons but also adjusted its price target to $69 from the previous $72. The downgrade suggests that Baird analysts believe the stock's risk/reward profile has become more balanced, potentially limiting its upside potential in the near term. This reassessment of Parsons' outlook has prompted some investors to reconsider their positions, leading to the sharp decline in share price.

However, it's worth noting that not all analysts share the same view on Parsons. Truist Securities, in contrast, raised its target price for the company to $80 from $70, indicating a more optimistic outlook. Despite this conflicting opinion, the overall market reaction appears to be driven by the Baird downgrade. According to FactSet, Parsons still maintains an average rating of overweight among analysts, with a mean price target of $79.88, suggesting potential long-term upside despite the current setback.