Market Overview

Height: Congressional Budget Deal A Boon For Private Prisons

Share:
Height: Congressional Budget Deal A Boon For Private Prisons
Related CXW
Earnings Scheduled For August 8, 2018
Mid-Afternoon Market Update: NASDAQ Rises 1%; Naked Brand Group Shares Spike Higher
Related GEO
22 Stocks Moving In Monday's Pre-Market Session
The GEO Group Q2 Earnings Preview

A little over two years ago, the very existence of Corecivic Inc (NYSE: CXW) and The GEO Group Inc (NYSE: GEO) appeared at risk.

Now, under the friendlier Trump administration, the private prison operators are forecasted not only to survive but to thrive, according to Height Securities. 

Congress is expected to pass a yearlong appropriations bill March 23, and the House and Senate proposals outline different, pro-prison Department of Homeland Security budgets. In the worse-case scenario for the private prison operators, the Senate secures funding on par with 2017 rates. In the best case, the House provides a 12-percent year-over-year increase for an additional 4,676 detention beds.

“However, the top-line funding to which lawmakers agreed as part of the two-year budget deal includes spending $63 billion above the sequestration caps for domestic levels in fiscal 2018,” Height Securities analyst Stefanie Miller said in a Friday note. “That is an encouraging data point since the additional funds give lawmakers flexibility to allocate money for more beds if they choose to do so."

The appropriations broken down for Immigration and Customs Enforcement, which contracts the prisons, will lend clarity on potential federal opportunities that have not yet materialized.

Height noted Tuesday that the contractors should see a revenue swell from rising ICE arrests.

At the time of publication, The GEO Group was trading up 1.53 percent at $20.28, while Corecivic traded up slightly at $21.49.

Related Links:

CoreCivic Responds To Claims Of Gang Violence, Staffing Vacancies: 'We Still Have Work To Do'

4 Reasons Private Prisons Could Still Prosper, With Or Without Jeff Sessions As AG

Latest Ratings for CXW

DateFirmActionFromTo
Feb 2018Deutsche BankMaintainsBuyBuy
Aug 2017Canaccord GenuityMaintainsBuy
Aug 2017Deutsche BankMaintainsBuy

View More Analyst Ratings for CXW
View the Latest Analyst Ratings

Posted-In: Congress department of homeland security federal budgetAnalyst Color Politics Top Stories Analyst Ratings General Best of Benzinga

 

Related Articles (CXW + GEO)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
NKEOppenheimerUpgrades0.0
SBEvercore ISI GroupUpgrades4.5
PTIRBC CapitalUpgrades0.0
GPSJP MorganDowngrades24.0
GIIIB. Riley FBRUpgrades47.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Stifel Sees Potential For H&E Equipment Services

Vetr Crowd Downgrades Veeva Systems