Analyst: CCA customers coming back around
Manav Patnaik at Barclays Capital on Tuesday raised his price target for shares of Corrections Corp. of America to $45 from $38 and reiterated his 'overweight' rating of the prison operator. Driving his move are improving fundamentals: Almost half of the company's state customers are budgeting for price increases and more than that expect more inmates in the coming year. Shares of CCA (Ticker: CXW) rose more than 3 percent Tuesday to more than $40 and have climbed about 14 percent so far this year.
Analyst action: CCA, LP
Manav Patnaik at Barclays has reiterated his overweight rating on shares of Corrections Corp. of America and raised his price target to $38 from $35. Shares of the prison management company (Ticker: CXW), whose execs are mulling a conversion to a real estate investment trust, are up more than 70 percent this year.
Credit Agricole analyst Mark Connelly has downgraded shares of Louisiana-Pacific to 'underperform' from 'outperform.' But like a number of his peers recently, Connelly has coupled his downgrade with a higher price target of $15 from $14. LP shares (Ticker: LPX) are up more than 1 percent this morning to about $14.30.
Analyst action: Tractor Supply, CCA
A number of analysts covering Tractor Supply have raised their price targets for the specialty retailer's shares, which already are up more than 40 percent this year. Joan Storms at Wedbush Securities sees the stock climbing to $112 on the back of the powerful combination of strong execution and continued growth potential. And Brent Rystrom at Feltl now rates Tractor Supply a 'buy' and has lifted his target to $105 from $91.
Two researchers following Corrections Corp. of America have recently gone in different directions on the prison operator. At Barclays Capital, Manav Patnaik has lifted his price target to $33 from $30 and reiterated his 'overweight' rating. But over at First Analysis, Todd Van Fleet sees the steady 2012 climb of CCA stock (Ticker: CXW) as a reason to lighten up. He has lowered the stock to 'equalweight' from 'overweight.'
Analyst action: Cracker Barrel, CCA
Wells Fargo Securities analyst Jeff Omohundro likes the changes Cracker Barrel Old Country Store CEO Sandy Cochran has made to the chain's holiday retail offerings and seasonal menu items as well as its new, more concentrated media strategy. He has reiterated his 'outperform' on Cracker Barrel shares (Ticker: CBRL) but now sees them rising more than 20 percent to a range of $60 to $64, up from $50 to $55.
Manav Patnaik at Barclays Capital has hiked his rating of Corrections Corp. of America shares to 'overweight' and says the company's relatively low leverage will let it weather what looks to be a "slow and frustrating" 2012 for new contract awards. Patnaik says Nashville-based CCA has the flexibility to buy back more shares — the board in August boosted its plan by $150 million — and maybe even issue a dividend. He has raised his price target by a dollar to $26. The company's shares (Ticker: CXW) have fallen about 13 percent this year and closed Wednesday trading at $21.67.
Analyst action: Gaylord, CCA
Goldman Sachs analyst Steven Kent has hiked his price target for shares of Gaylord Entertainment following the hotel and resort operator's third-quarter earnings. Kent, who is neutral on Gaylord shares, also raised his earnings forecasts and now sees the stock (Ticker: GET) climbing to $35, less than 4 percent above where they closed Monday trading. Gaylord is down more than 4 percent this afternoon. At Barclays Capital, Manav Patnaik has lifted his target on Corrections Corp. of America shares — despite lowering his rating to 'equalweight' from 'overweight.' The Nashville company's main competitor, The GEO Group, is a better bet for investors, he says. CCA's shares (Ticker: CXW) are off more than 3 percent today.Analyst action: CCA, Cracker Barrel
Barclays Capital analyst Manav Patnaik likes the steady growth of Corrections Corp. of America and has reiterated his 'outperform' rating on the company's shares — even though his $27 price targets leaves only about 8 percent upside. Meanwhile, Rhino Stock Report Editor Jonas Elmerraji writes at TheStreet.com that CCA (Ticker: CXW) looks poised to break out technically. Also at TheStreet.com are some notes on the casual-dining sector – specifically operators with a breakfast angle — by New Jersey money manager Scott Rothbort, who calls Cracker Barrel his favorite dining stock right now. He likes the Lebanon-based company's (Ticker: CBRL) debt management, commodity cost controls and growth plans.Explaining CCA's big move
Corrections Corp. of America shares (Ticker: CXW) rallied more than 7 percent Tuesday after the company raised its earnings outlook by about 5 percent. Avondale Partners analyst Kevin Campbell says the drivers of that revision — higher (and likely temporary) U.S. Marshals Service volume and a contract to house hundreds of inmates in California —aren't likely to have a big financial impact. So why the investor enthusiasm? Campbell told clients yesterday that the new contract "illustrates the theme of consolidation of federal beds at larger facilities and begins the process of filling an asset in a less desirable location." Campbell reiterated his $27 price target and was joined there yesterday by Barclays Capital analyst Manav Patnaik.
