Jones Trading Downgrades GEO Group to Buy, PT to $45 from $50

Jones Trading Downgrades GEO Group to Buy, PT to $45 from $50

Jones Trading has recently downgraded its rating on GEO Group, Inc. (GEO) to a "Buy" recommendation, adjusting its price target from $50 to $45. The downgrade comes amidst the company's strong second-quarter (Q2) 2025 results, which saw the activation of four major Immigration and Customs Enforcement (ICE) facilities, generating over $240 million in annualized revenue [1].

The Q2 2025 results highlighted significant progress in meeting growth and strategic objectives, with ICE facility utilization increasing to 20,000 beds across 21 facilities. George C. Zoley, Executive Chairman, noted that the company is in active discussions to activate an additional 5,900 idle beds, which could contribute up to $310 million in annualized revenue if fully utilized [1]. The company also completed the sale of its Lawton Facility for $312 million and acquired the Western Regional Detention Facility for approximately $60 million in a like-kind exchange.

GEO's Board authorized a $300 million share repurchase program, with plans to repurchase $100 million per year through June 2028 while targeting $100 million per year in debt reduction. The company's CFO, Mark J. Suchinski, mentioned that the company has increased its budget to approximately $100 million in physical plant and technology improvement to better position GEO in responding to ICE's expanding needs [1].

Despite the strong Q2 results, Jones Trading cited concerns about the pace and timing of facility activations and ISAP contract extensions, leading to the downgrade. The analysts also pointed to potential risks, including delayed or partial revenue recognition due to activation timing and the need for additional ICE and Marshals funding to activate idle facilities.

The stock price prediction for GEO Group, based on advanced algorithm analysis, projects a significant movement in the coming periods. The 1-day prediction estimates a price of $25.92, while the 1-month forecast projects a price of $26.31. However, the long-term 2030 forecast reaches $34.84 [2].

References:
[1] https://seekingalpha.com/news/4480804-geo-group-outlines-240m-new-ice-contracts-and-launches-300m-buyback-amid-record-q2-results
[2] https://intellectia.ai/stock/GEO/forecast