Wedbush upgrades Geo Group to Outperform, raises price target to $14

As previously reported, Wedbush analyst Jay McCanless upgraded Geo Group to Outperform from Neutral with a price target of $14, up from $10. The analyst notes that his prior rating was based on some of the negative headwinds facing the private prison industry, including declining prison populations and political opposition to the business, along with questions surrounding the strength of the company’s balance sheet. However, he now believes there are several tailwinds in place to offset these concerns, including a potential near-term revocation of Title 42, a recent successful debt restructuring transaction, and shifting political sentiment towards alternatives to detention, which should drive growth in the company’s high margin electronic monitoring business.