US prison operator shares gain, extend election-related rally

Geo

07/11/2024 19:00

By Caroline Valetkevitch
       NEW YORK, Nov 7 (Reuters) - Shares of prison operators
Geo Group  GEO.N  and CoreCivic Inc.  CXW.N  surged on Thursday,
extending sharp gains following the U.S. presidential victory by
Republican Donald Trump, whose promise of tough immigration
measures is seen as potentially boosting demand for detention
centers.
    CoreCivic late on Wednesday reported quarterly results that
topped analysts' expectations and raised its outlook. Its stock
was last up about 23% and hit its highest level intraday since
June 2019.
    Geo Group's stock also rose on Thursday despite the
company's earlier in the day posting revenue results that missed
consensus expectations and lowering its full-year earnings
forecast. The stock was last up about 10% and hit its highest
level since 2018.
    On Wednesday, Geo Group's stock surged 42% and CoreCivic
jumped 29% after former U.S. president Trump, who has promised
to crack down on illegal immigration, won the White House vote
on Tuesday against Kamala Harris, the Democratic vice president.
    "Shares moved significantly higher yesterday following the
initial results of the election," Wedbush analysts wrote in a
note on Thursday.
    But, they added, "It is likely too early to fully gauge the
impact of election" for either company's outlook.
    CoreCivic's chief executive, Damon Hininger, in the
company's release said that occupancy rose to 75.2% from 72% in
the year-ago quarter and noted an improvement in the operating
margin due to expense management and demand for essential
services.
    CoreCivic's stock is now up about 58% since Tuesday's close,
and Geo Group's stock is up about 57% for that period.
    

 (Reporting by Caroline Valetkevitch; additional reporting by
Lance Tupper; Editing by Leslie Adler)
 ((caroline.valetkevitch@thomsonreuters.com))