CXW - CoreCivic's Plunge Does Not Constitute A Buying Opportunity
2024-06-11 18:15:01 ET
Summary
- CoreCivic, Inc. and Target Hospitality shares plummeted due to the US government ending the contract for detention of undocumented immigrants at a Texas facility.
- CoreCivic's revenue and profitability will be severely impacted, while Target Hospitality may see a smaller impact.
- This could create a buying opportunity for Target Hospitality, but investors in CoreCivic should approach the situation cautiously.
June 11th was a very painful day for shareholders of the publicly traded prison operators. Shares of CoreCivic, Inc. ( CXW ) plummeted, declining by roughly 21.3% in midday trading. Even worse was the performance of Target Hospitality Corp. ( TH ). Its shares plummeted roughly 32.4%. At issue is the news that, in about 60 days, the U.S. government will no longer be paying for the detention of undocumented immigrants at the South Texas Family Residential Center in Dilley, Texas. Both companies generate revenue from providing these services at that facility. And clearly, this will have a negative impact on both firms....
CoreCivic's Plunge Does Not Constitute A Buying Opportunity