Whit Mayo, an analyst from Leerink Partners, reiterated the Buy rating on Tenet Healthcare (THC – Research Report). The associated price target is $115.00.
Whit Mayo has given his Buy rating due to a combination of factors that suggest Tenet Healthcare is poised for continued financial success. Tenet’s fourth quarter of 2023 displayed robust volume growth and significantly improved labor trends, contributing to a stronger-than-anticipated operational performance. The integration of Conifer into the Acute segment has streamlined reporting and enhanced margin optics, which, coupled with the attainable high-end guidance provided by the company, signals a promising future. The valuation of Tenet’s stock also appears attractive, trading at roughly 7 times the estimated EBITDA for 2025, which presents a compelling investment opportunity when considering the solid operating environment and positive earnings projections.
Further bolstering the Buy recommendation, Tenet’s Acute and Conifer segments outperformed forecasts with their fourth-quarter EBITDA, driven by effective volume increases, labor cost management, and strategic expense management. The USPI segment also demonstrated impressive same-store revenue growth, indicative of strong service mix and orthopedic growth. While estimates for 2024 and 2025 have been adjusted to account for asset sales, the increased price target to $115 reflects a consistent EBITDA multiple and anticipates a positive earnings trajectory, underpinning the potential for Tenet Healthcare’s stock to deliver solid returns for investors.
Mayo covers the Healthcare sector, focusing on stocks such as Cigna, Pediatrix Medical Group, and Tenet Healthcare. According to TipRanks, Mayo has an average return of 3.4% and a 53.38% success rate on recommended stocks.
In another report released on February 9, Citi also maintained a Buy rating on the stock with a $104.00 price target.
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Tenet Healthcare (THC) Company Description:
Tenet Healthcare Corp. engages in the provision of health care services. Through its subsidiaries and affiliates, it owns and facilitates acute care hospitals, ambulatory surgery centers, diagnostic imaging centers, and related health care facilities. It operates through the following business segments: Hospital Operations and Other, Ambulatory Care, and Conifer. The Hospital Operations and Other segment comprises of acute care hospitals, ancillary outpatient facilities, urgent care centers, microhospitals and physician practices. The Ambulatory Care segment includes operations of USPI joint venture and the company’s nine Aspen facilities in the United Kingdom. The Conifer segment offers healthcare business process services in the areas of hospital and physician revenue cycle management and value-based care solutions to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans, and other entities. The company was founded in 1975 and is headquartered in Dallas, TX.
Read More on THC:
- Tenet Healthcare price target raised to $109 from $97 at RBC Capital
- Tenet Healthcare price target raised to $100 from $75 at Deutsche Bank
- Tenet Healthcare price target raised to $105 from $92 at Truist
- Tenet Healthcare price target raised to $104 from $94 at Cantor Fitzgerald
- Tenet Healthcare price target raised to $100 from $90 at Mizuho
