Canaccord Genuity Raises Price Target on Corrections Corporation of America (CXW) After Meeting with Management

Canaccord Genuity reiterated a Hold rating on Corrections Corporation of America (NYSE: CXW), and raised the price target to $33.00 (from $30.00), after hosting meetings with management. Management highlighted uncertainty in the context of a Democratic president with regard to their views, as well as their control over the private prison sector. Management highlighted that CXW's survey work indicates the issue does not fall into the top ten concerns for most Americans today and that once the primaries are over, the party candidates are each likely to gravitate toward the center to win the general election. However, While family detention has drawn considerable ire from the media and several political candidates in recent months, management illustrated a few issues that indicate less cash flow risk.

Analyst Ryan Meliker commented, "Last week, we hosted meetings between CXW management and institutional investors across multiple markets. The general tone of the meetings was positive as investors seemed to focus on growth opportunities for CXW and regulatory and political risks that could impact cash flows. Following the meetings, we continue to believe that investment in the private prison space necessitates caution, as the stocks face headwinds associated with election rhetoric. We believe that this, along with general clamor for sentencing reform, limits upside to the stocks in the near term. However, we don't see these headwinds translating into any near-term cash flow disruption, and our confidence in that view only increased following last week's meetings. Given that backdrop, while we see material upside to CXW over time, we are reluctant to step in front of the stock before the election rhetoric is behind us. We are raising our year-end 2016 PT by $3 to $33, but maintain our HOLD rating."

For an analyst ratings summary and ratings history on Corrections Corporation of America click here. For more ratings news on Corrections Corporation of America click here.

Shares of Corrections Corporation of America closed at $31.39 yesterday.

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