UPDATE: Dawson James Downgrades The GEO Group to Market Perform on Valuation
Dawson James reduced its rating on The GEO Group (NYSE: GEO) from Market Outperform to Market Perform and removed its previous $27.50 price target.
Dawson James commented, "GEO shares have performed very well this year, due to positive anticipation of a potential conversion to REIT status either in 2013 or 2014, steady and on-track revenue and earnings reports, and most recently the potential of a near-term special dividend. As such, GEO shares have met and exceeded our price target of $27.50, and although valuation metrics related to our four-stock comparable company analysis would suggest that GEO is undervalued (especially in terms of the price/earnings ratio for 2012E), we are going to downgrade these shares to Market Perform from Market Outperform (Buy) until such a time as the full impact of the potential REIT conversion and/or special dividend on 2013 estimates can be evaluated."
The GEO Group closed at $29.77 on Monday.
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