Private prison firms jump amid growing demand for immigration detention facilities

Yesterday, February 27, quotes on Geo Group, a small-cap private prison company, gained just over 6%, while its peer, CoreCivic, saw its stock jump 4%. This came after both companies announced new contracts with U.S. Immigration and Customs Enforcement (ICE). Overall, with U.S. demand for detention facilities to house illegal aliens rising amid the crackdown on immigration under Donald Trump, Geo Group and CoreCivic see “unprecedented opportunities” ahead.

Yesterday, the two detention facility operators saw their stocks surge on the New York Stock Exchange:

— Geo Group advanced just over 6% to $27.30 per share before dipping slightly in premarket trading today;

— CoreCivic gained 4% to $18.90 per share before extending the gains before the opening bell today, when it climbed about another 2%.

Earlier in the day yesterday, both companies announced signed contracts with ICE to expand detention capacity for illegal aliens.

Geo Group’s 15-year contract envisages the establishment of an immigration center at its existing 1,000-bed facility in Newark, New Jersey. The company will also provide maintenance and food services, as well as medical care and legal counsel. Geo Group expects to generate more than $60 million in revenue in the first year alone and around $1 billion in total. For context, the company reported $2.42 billion in revenue in 2024.

CoreCivic will add 1,032 beds across four of its correctional facilities for ICE detainees. The company has disclosed no further details, and the value of the contract remains unknown.

According to CoreCivic’s estimates, ICE may soon require between 60,000 and 110,000 incremental detention beds, as the analytical firm Zacks SCR previously reported, citing the recent passage of the Laken Riley Act, which expands the list of offenses that require detention of aliens.

Shortly after Donald Trump signed the Laken Riley Act into law, his administration revoked an executive order that sought to eliminate the use of privately operated correctional facilities. At the same time, it authorized the detention of immigration-law violators until their deportation. Later, the Department of Homeland Security was instructed to acquire all available detention beds usable for the detention of deportable migrants, CoreCivic CEO Damon T. Hininger said at the beginning of the month. The company expects more contracts coming its way. Geo Group also describes the opportunity under the Trump administration as “unprecedented.”

Over the last 12 months, Geo Group has more than doubled, adding over 124%. According to MarketWatch, out of the four analysts covering the name, three have “buy” recommendations, while one rates it a “hold.” Their average target price of $42 per share suggests upside of almost 54%.

CoreCivic has gained about 30% over the last 12 months. It also has four Wall Street analyst ratings, all of which are “buys.” The average target price of $28 per share implies 48% upside versus yesterday’s closing price. In mid-February, Noble Capital Markets set a target price for CoreCivic of $25 per share, citing the potential for historical growth for the company under the Trump administration and the Republican-controlled Congress.