CXW Should I Buy

As previously reported, Texas Capital analyst Raj Sharma initiated coverage of CoreCivic (CXW) with a Buy rating and $28 price target. Private prisons currently contain less than 8% of the country's prison population, with CoreCivic being the largest owner/operator in the U.S. and largest private-owner of correctional real estate utilized by government agencies in the U.S., the analyst tells investors. While both CoreCivic and peer Geo Group (GEO) are "attractive investments," the investment case for for the former centers on deployment of currently idle incremental prison facilities, as well as potentially winning incremental monitoring and supervision contracts over the next 12 to 24 months, the analyst says. CoreCivic currently has eight idle facilities that could be reopened under "favorable contract terms," the analyst added.