Trump’s Tough Immigration Stance Could Fuel Private Prison Profits: CoreCivic and Geo Group Prepare for Expansion
Revitalized Demand for Private Prisons
The Trump administration’s immigration policies could significantly boost business for U.S. private prison operators. With a commitment to crack down on illegal immigration, private prison giants CoreCivic and Geo Group stand to see a substantial increase in profits. Both companies, contracting with U.S. Immigration and Customs Enforcement (ICE) to house undocumented migrants, experienced a surge in their stock prices following Trump’s election win, reflecting investor confidence in an anticipated revenue boost from more stringent immigration policies.
Stock Surge Signals Investor Confidence
This anticipated increase in immigration enforcement under Trump is visible in the stock performance of both companies. CoreCivic’s share price rose from $13.50 to $22, while Geo Group’s share price climbed from $15 to $23.75. Joe Gomes, a Noble Capital Markets analyst, remarked, “Investors believe there is going to be a significant increase in opportunity for both of these firms under the Trump administration.”
A History of Private Detention Under Trump
During Trump’s first term (2017-2021), ICE detention reached record levels, with an average of 50,000 individuals held daily in 2019—about 50% higher than peak levels during the Obama administration. According to the ACLU, 81% of ICE detainees in early 2020 were held in facilities owned or managed by private corporations, highlighting Trump’s reliance on private prison companies.
With Trump now promising the largest deportation operation in U.S. history, CoreCivic and Geo Group are prepared to meet ICE’s anticipated needs. Both companies have noted that they have excess capacity and can quickly scale operations to accommodate additional detainees.
Prepared for the Incoming Demand
Geo Group, in a recent earnings call, highlighted its readiness to support ICE’s expanded requirements. Beyond detention, the company provides monitoring services through its Intensive Supervision Appearance Program (ISAP), which uses wearable technology to track participants as an alternative to detention. Geo Group executives added that they have the resources to scale ISAP, potentially expanding to accommodate millions of participants if necessary.
Funding and Legislative Hurdles
For ICE to expand its contracts with CoreCivic and Geo Group, the level of congressional funding will be critical. While Republicans secured a Senate majority, the House majority remains uncertain. A Republican-led Congress would likely support Trump’s immigration enforcement initiatives, facilitating funding for additional detention facilities and services. However, the potential for increased scrutiny and opposition from Democratic lawmakers and advocacy groups remains.
With the infrastructure and monitoring systems in place, CoreCivic and Geo Group are positioned to capitalize on new opportunities under Trump’s proposed policies. Congressional funding will play a crucial role, but if authorized, this expansion could provide a significant boost for the private prison industry. However, it also raises ethical concerns regarding the potential for profit from intensified detention and deportation activities.