Nt4.zacks.com



| Corecivic Inc |(CXW-NYSE) |

|Current Price (05/16/22) |$11.33 |

|Valuation | |

OUTLOOK

|Analyst must write |

SUMMARY DATA

|52-Week High |$13.81 |

|52-Week Low |$7.45 |

|One-Year Return (%) |39.36 |

|Beta |0.84 |

|Average Daily Volume (sh) |1,157,305 |

| | |

|Shares Outstanding (mil) |122 |

|Market Capitalization ($mil) |$1,378 |

|Short Interest Ratio (days) |N/A |

|Institutional Ownership (%) |82 |

|Insider Ownership (%) |2 |

| | |

|Annual Cash Dividend |$0.00 |

|Dividend Yield (%) |0.00 |

| | |

|5-Yr. Historical Growth Rates | |

| Sales (%) |1.3 |

| Earnings Per Share (%) |-4.8 |

| Dividend (%) |2.0 |

| | |

|P/E using TTM EPS |6.4 |

|P/E using 2022 Estimate |7.4 |

|P/E using 2023 Estimate |6.6 |

| | |

|Zacks Rank |N/A |

| | |

|Risk Level |Above Avg., |

|Type of Stock |Mid-Value |

|Industry |N/A |

KEY POINTS

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OVERVIEW

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INDUSTRY OUTLOOK

INDUSTRY OUTLOOK - NEUTRAL

Our outlook for the publicly traded real estate industry, comprised primarily of real estate investment trusts (REITs), is neutral. The sector is at an interesting inflection point in its typical cycle. Operating fundamentals have been declining over the past few years, but are finally beginning to stabilize. Cash flow across the sectors has been depressed, but some companies are beginning to forecast growth over the next year. Despite the weak operating environment, REIT share prices are at or just off all-time highs, as historically low-interest rates have inflated FFO multiples well above past ranges. With access to exceptionally cheap capital (most REITs can borrow at 5% or less) and relatively low cost of capital (given high cash flow multiples being paid by investors), most REIT owners can buy low-growth, low cap rate properties (defined as net operating income (NOI) yield on invested capital) and still make profitable spreads. Given the low cap rate environment, most companies are taking the opportunity to prune their portfolios and achieve extremely attractive pricing on dispositions, using proceeds in most cases to pay down debt and strengthen balance sheets. With some companies' operating results still negative, a few companies must sell assets to maintain their dividends, which we view as a fairly large negative when evaluating the investment merits of individual companies, as financing a net deficit will put these companies at a competitive disadvantage when external growth via acquisition becomes more attractive (i.e., they will not have the available capital competing buyers will have). The confluence of low but rising interest rates, high multiples, and negative to stabilizing operating results should make for a relatively flat trading market for REIT shares. As interest rates rise, which we believe will continue for the foreseeable future, we would expect multiples to contract (or, share prices will come down). However, with operating results stabilizing, most REITs should be able to grow into inflated multiples over the next few years via FFO expansion, leaving investors with a relatively flat outlook for share prices but overall positive returns when including dividends, which currently yield about 5% over the sectors.

Some sectors are better positioned than others at this point in the cycle. With continuing strong consumption in the U.S., retail REITs should continue to see favorable returns. Recent M&A activity might suggest a near-term top in the mall REIT sector: Simon Property Group (SPG) recently announced its intentions to acquire Chelsea Property Group (CPG), and General Growth Properties (GGP) closed its previously announced acquisition of Rouse (RSE). We continue to believe that investors should see near-term gains in strip-center REITs, with Developer's Diversified (DDR) and Federal Realty Trust (FRT), in particular, showing continuing strength in operations, and relatively modest valuations.

We believe that in a rising interest rate environment, which implies improving economic growth for the most part, real estate services companies should provide outstanding returns for investors. While asset owners should see some contraction in multiples, any pick-up in economic activity generally helps companies such as Jones Lang LaSalle (JLL), whose leasing and asset management services business generally see increasing demand as the economy improves.

Mortgage REITs continue to demonstrate discipline in spread investing operations, and debt issuance among most REITs continues to grow, giving companies in this sector ample opportunity for investment. We believe most companies in this sector are fairly valued however, therefore shares may trade in a range at this point.

We view the apartment and office/industrial sectors unfavorably for the most part. Most companies in both sectors have yet to find an operating bottom, and as such, have not yet seen an uptick in operating results. Apartment REITs, in particular, may be in a secular operating decline, with access to affordable mortgage financing increasing for first-time and lower-income home buyers, who have historically been the primary apartment renting demographic. For investors looking to invest in apartment REITs, we believe the only place to put money to work is in companies located in markets where monthly rents are measurably less expensive than a competing monthly mortgage payment (or where the housing affordability index is relatively high). Office owners continue to see rent roll-downs (or lower market rates) on expiring leases. In most markets, market rent rates are 10%-15% lower than existing lease rates, which should continue to pressure office REIT cash flow in 2005. Importantly, both sectors are struggling with dividend coverage, as most office and apartment REITs are running at negative free cash flow after a few years of declining cash flow and must sell properties to help pay quarterly dividends.

On a valuation basis, most sectors are trading at the upper end of historical ranges, with apartment REITs the highest among all sectors. On average, most REITs are trading at 12x-13x 2005 estimated FFO, with an average dividend yield in the 5% range. Most REITs continue to trade at premiums to net asset value (NAV), typically in the 110%-115% range, but some as high as 120% of NAV. Historically, REITs have traded at slight premiums to NAV more in the 103%-106% range. Overall, we are forecasting relatively flat FFO growth in 2005 overall, particularly as some of the heavier property sellers see near-term NOI dilution, and resultant FFO declines, as a result of smaller portfolios without offsetting acquisitions to maintain run-rates. In a six to 12 month timeframe, we believe investors should see about 5% total returns at this point, almost entirely derived of dividends.

INDUSTRY POSITION

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RECENT NEWS

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VALUATION

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RISKS

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INSIDER TRADING AND OWNERSHIP

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PROJECTED INCOME STATEMENT & BALANCE SHEET

Historical Stock Price

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DISCLOSURES

The following disclosures relate to relationships between Zacks Small-Cap Research (“Zacks SCR”), a division of Zacks Investment Research (“ZIR”), and the issuers covered by the Zacks SCR Analysts in the Small-Cap Universe.

ANALYST DISCLOSURES

I, Marla Backer, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report. I believe the information used for the creation of this report has been obtained from sources I considered to be reliable, but I can neither guarantee nor represent the completeness or accuracy of the information herewith. Such information and the opinions expressed are subject to change without notice.

INVESTMENT BANKING AND FEES FOR SERVICES

Zacks SCR does not provide investment banking services nor has it received compensation for investment banking services from the issuers of the securities covered in this report or article.

Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm engaged by the issuer for providing non-investment banking services to this issuer and expects to receive additional compensation for such non-investment banking services provided to this issuer. The non-investment banking services provided to the issuer includes the preparation of this report, investor relations services, investment software, financial database analysis, organization of non-deal road shows, and attendance fees for conferences sponsored or co-sponsored by Zacks SCR. The fees for these services vary on a per-client basis and are subject to the number and types of services contracted. Fees typically range between ten thousand and fifty thousand dollars per annum. Details of fees paid by this issuer are available upon request.

POLICY DISCLOSURES

This report provides an objective valuation of the issuer today and expected valuations of the issuer at various future dates based on applying standard investment valuation methodologies to the revenue and EPS forecasts made by the SCR Analyst of the issuer’s business.

SCR Analysts are restricted from holding or trading securities in the issuers that they cover. ZIR and Zacks SCR do not make a market in any security followed by SCR nor do they act as dealers in these securities. Each Zacks SCR Analyst has full discretion over the valuation of the issuer included in this report based on his or her own due diligence. SCR Analysts are paid based on the number of companies they cover.

SCR Analyst compensation is not, was not, nor will be, directly or indirectly, related to the specific valuations or views expressed in any report or article.

ADDITIONAL INFORMATION

Additional information is available upon request. Zacks SCR reports and articles are based on data obtained from sources that it believes to be reliable, but are not guaranteed to be accurate nor do they purport to be complete. Because of individual financial or investment objectives and/or financial circumstances, this report or article should not be construed as advice designed to meet the particular investment needs of any investor. Investing involves risk. Any opinions expressed by Zacks SCR Analysts are subject to change without notice. Reports or articles or tweets are not to be construed as an offer or solicitation of an offer to buy or sell the securities herein mentioned.

CANADIAN COVERAGE

This research report is a product of Zacks SCR and prepared by a research analyst who is employed by or is a consultant to Zacks SCR. The research analyst preparing the research report is resident outside of Canada, and is not an associated person of any Canadian registered adviser and/or dealer. Therefore, the analyst is not subject to supervision by a Canadian registered adviser and/or dealer, and is not required to satisfy the regulatory licensing requirements of any Canadian provincial securities regulators, the Investment Industry Regulatory Organization of Canada and is not required to otherwise comply with Canadian rules or regulations.

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Month Day, Year

Zacks Small-Cap Research Marla Backer

312-265-xxxx

email@

scr. 10 S. Riverside Plaza, Chicago, IL 60606

Sponsored – Impartial - Comprehensive

Sponsored – Impartial - Comprehensive

CXW: Zacks Company Report

Text…

ZACKS ESTIMATES

Revenue

(in millions of $)

| |Q1 |Q2 |Q3 |Q4 |Year |

| |(Mar) |(Jun) |(Sep) |(Dec) |(Dec) |

|2020 |491 A |473 A |468 A |473 A |1,905 A |

|2021 |455 A |465 A |471 A |472 A |1,863 A |

|2022 |453 A |460 E |478 E |483 E |1,874 E |

|2023 | | | | |1,955 E |

Price/Sales Ratio (Industry = 2.5x)

| |Q1 |Q2 |Q3 |Q4 |Year |

| |(Mar) |(Jun) |(Sep) |(Dec) |(Dec) |

|2020 |$0.54 A |$0.56 A |$0.52 A |$0.63 A |$2.25 A |

|2021 |$0.44 A |$0.46 A |$0.48 A |$0.48 A |$1.85 A |

|2022 |$0.34 A |$0.36 E |$0.41 E |$0.42 E |$1.52 E |

|2023 | | | | |$1.73 E |

|Zacks Projected EPS Growth Rate - Next 5 Years % |N/A |

|N/A |N/A |

| Top 5 Public Companies in the industry |

| | | | |

|Ticker |Company |Market Share |Zacks |

|  |  | |Rec |

|HST |Host Hotel&Rsrt |7.52357 |Hold |

|CCI |Crown Castle |5.18511 |Hold |

|HCN |Health Cr Reit |4.69843 |Hold |

|VTR |Ventas Inc |4.32211 |Hold |

|VNO |Vornado Rlty Tr |3.70408 |Buy |

Industry Comparables

| |Pr Chg |P/E CurrFY |EPS Gr |Price/ |Price/ |Price/ |

| |YTD | |5Yr Est |Book |Sales |CF |

|CORECIVIC INC |13.6 |7.5 | |1.0 |0.7 |5.1 |

| | | | | | | |

|Industry Mean |0.0 |0.0 |0.0 |0.0 |0.0 |0.0 |

|Industry Median |0.0 |0.0 |0.0 |0.0 |0.0 |0.0 |

|S&P 500 |-15.9 |17.7 | |11.9 |0.0 |19.8 |

| | | | | | | |

|LAMAR ADVER CO |-18.7 |14.2 | |8.2 |5.4 |15.0 |

|HEALTHPEAK PPTY |-16.3 |17.4 |5.8 |2.3 |8.4 |22.2 |

|PARK HOTELS&RES |-3.1 |15.8 | |1.0 |2.5 | |

|EXTRA SPACE STG |-21.2 |21.6 |7.3 |6.2 |14.4 |21.2 |

| | | | | | | |

| Corecivic Inc |  |

|Income Statement and Balance Sheet |  |

|(Dollars in millions, except EPS data) |  |

|  | | | | | | | | |

| |12/17 |12/18 |N/A |12/20 |12/21 |12/22E |

|Sales | |1,765 |1,836 |1,981 |1,905 |1,863 |1,874 |

|  |Cost of Goods Sold |1,250 |1,315 |1,423 |1,406 |1,337 |1,346 |

|  |SG&A |108 |115 |132 |186 |201 |203 |

|  |Other operating expenses |147 |157 |145 |151 |135 |136 |

|  |Interest and other |82 |90 |93 |107 |241 |243 |

|Zacks Adjusted Income before NRI |186 |172 |189 |54 |127 |185 |

|Net Income |178 |159 |189 |54 |-52 |185 |

|Diluted EPS before NRI |1.57 |1.45 |1.59 |0.45 |1.04 |1.52 |

|Reported EPS |1.50 |1.34 |1.59 |0.45 |-0.43 |1.52 |

|  | | | | | | |

|Cash & Marketable Securities |52 |74 |119 |137 |311 |311 |

|Current Assets |327 |374 |435 |717 |627 |627 |

|Current Liabilities |291 |366 |369 |313 |341 |341 |

|Long Term Debt |1,437 |1,788 |1,928 |1,748 |1,492 |1,492 |

|Shareholder's Equity |1,452 |1,415 |1,377 |1,413 |1,372 |1,558 |

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