CoreCivic Beats Estimates, Raises Guidance Across The Board In Q4 Report

Despite the 20 percent year to date appreciation in Corecivic Inc CXW shares, Canaccord Genuity’s Michael Kodesch believes the beat and raise quarter reported by the company, along with the current political environment, is likely to be sufficient to sustain the momentum.

The analyst maintains a Buy rating on the company, with a price target of $30.

Beat Results

CoreCivic reported strong results for fourth-quarter 2016, with the FFO and EBITDA well ahead of the consensus, guidance and estimates, driven mainly by strict expense control. Revenues from owned and managed facilities were also ahead of expectations.

However, Kodesch noted that despite the “$9 million adjusted EBITDA beat relative to the midpoint of guidance in 4Q, full-year 2017 guidance was only raised $1 million at the midpoint, suggesting that the cost saves are largely unsustainable moving through 2017.”

The analyst expects the stock to react favorably at market open, although more color on the expense beat, CAR-16 renewal and growth opportunities are likely to decide how the stock performs after that.

Guidance Raised

CoreCivic raised its 2017 guidance, with the adjusted EBITDA up $1 million at the midpoint, ahead of the estimate and the consensus forecast.

The FFO per share guidance for the full year has also been marginally raised, with the high end again ahead of expectations.

The company also provided robust Q1 guidance, ahead of the consensus forecasts and estimates.

At last check ahead of Thursday's opening bell, shares of CoreCivic were up 3.5 percent at $30.50.