) with buy.
Analyst Andrew May says private-prison sector trends are strong: demographics are favorable, state budgets are constrained, and prison and jail populations continue to rise. He says Wackenhut stands to benefit from these trends. He notes the company controls approximately 22% of all beds under private contract.
May says Wackenhut also is pursuing contracts for 1,000 mental health beds in multiple states, and should be well positioned-to win some of this new business. He sees sees $1.14 2003 earnings per share, and $1.45 for 2004. He thinks the current valuation is very compelling; shares trade at a discount to peers. May set a 12-month to 18-month price target of $24.