Potential Solution. Yesterday afternoon local news reported that an agreement had been reached to keep USMS inmates in CoreCivic's Northeast Ohio facility. While we have not been able to confirm the USMS signed off on the agreement, if the USMS signs off on this, it would remove a significant obstacle for CoreCivic, in our view.The Report. According to a report on ww.cleveland.com, the Mahoning County commissioners approved a three-year contract with CoreCivic. In essence, the county Sheriff's office would contract with CoreCivic to monitor the USMS inmates, with the USMS reimbursing the Sheriff's office for the cost of the contract. This provides an intermediary between the USMS and CoreCivic. Contract details were not released.Intergovernmental Services Agreement. As we have pointed out in previous reports, we believed restructuring of USMS contracts in this manner results in a win-win-win scenario. Obviously, for CoreCivic, as it retains the business. For the USMS, the agency does not own any facilities to which it could relocate inmates from private operators, nor does it have the infrastructure in place for increased transportation of the inmates. in such an event. And for the local communities, which retain jobs and tax dollars. CoreCivic has two additional contracts up for renewal this year that could benefit from this precedent.ICE. ICE average daily populations continue to increase, along with border encounters. Since bottoming in February at just over 14,000, the average so far in May is 18,434 and has been increasing suggesting ADP continues to increase. And, if title 42 is rescinded ADPs are likely to increase even further, in our view.Maintaining Outperform and $15 PT. We continue to believe CXW shares present a compelling risk/reward opportunity. We believe the services offered by CoreCivic are needed by its government partners to solve the complex issues they face. We are maintaining our Outperform rating and $15.00 12-month price target. Read More >>