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On Tuesday, BofA Securities adjusted its outlook on Tenet Healthcare (NYSE:THC), increasing the price target to $180 from the previous $165, while reaffirming a Buy rating on the company’s shares. The revision follows a fireside chat with Tenet’s executive leadership at the BofA Health Care Conference. The stock, currently trading at $157.70, appears undervalued according to InvestingPro analysis, with analyst targets ranging from $137 to $230.
During the conference, Tenet Healthcare’s CEO Saum Sutaria, CFO Sun Park, and VP of Investor Relations Will McDowell, shared insights into the company’s strategic initiatives. The leadership expressed a confident stance on achieving growth objectives, efficient capital deployment, cost management, and the expansion of the Ambulatory Surgery Center (ASC) business. With a market capitalization of $14.67 billion and robust EBITDA of $4.2 billion, the company maintains a strong financial position, earning a "GREAT" Financial Health Score from InvestingPro. Despite uncertainties tied to policy and macroeconomic factors, the company’s tone remained optimistic.
BofA Securities’ analyst cited the shift towards the ASC business, which is growing more rapidly, as a key reason for maintaining the Buy rating. The increased price target reflects a boost in confidence regarding Tenet’s financial estimates and a comparison to higher peer multiples. The stock trades at an attractive P/E ratio of 10.4x, with impressive YTD returns of 25%. Specifically, the firm now applies a multiple of 8.6 times the projected 2025 EBITDA, up from the previous 8.1 times. Get deeper insights into Tenet’s valuation metrics and growth potential with a comprehensive Pro Research Report, available exclusively on InvestingPro.
The endorsement from BofA Securities comes as Tenet Healthcare continues to navigate the complex healthcare landscape, with a focus on strategic areas that promise growth and profitability. The company’s efforts to control costs and strategically deploy capital are integral to its long-term financial health and market performance.
The adjustment in Tenet Healthcare’s price target is indicative of BofA Securities’ belief in the company’s potential to outperform in the healthcare sector. Investors and market watchers will likely monitor Tenet’s progress closely, especially in the expansion of its ASC business, which is central to the company’s growth strategy.
In other recent news, Tenet Healthcare Corporation reported impressive financial results for the first quarter of 2025, surpassing Wall Street expectations. The company achieved earnings per share (EPS) of $4.36, significantly higher than the forecasted $3.17, and generated revenue of $5.22 billion, exceeding the anticipated $5.14 billion. Tenet’s performance was bolstered by its Ambulatory Surgery Center (ASC) segment, which showed strong growth in patient acuity, and effective cost management within its Hospital segment. In light of these results, Cantor Fitzgerald maintained an Overweight rating on Tenet’s stock, with a price target of $177, citing the company’s clear financial guidance as a key attraction for investors amid political uncertainties.
Additionally, Goldman Sachs adjusted its price target for Tenet Healthcare to $154 from $134, while keeping a Neutral rating. This revision reflects Tenet’s robust fundamentals and improved financial projections. The firm noted that potential policy changes under the current administration could pose risks, contributing to the maintained Neutral stance. Tenet also repurchased 2.6 million shares for $348 million, indicating confidence in its financial health and future prospects. The company’s reaffirmation of its full-year 2025 guidance further underscores its strategic focus on expanding ambulatory surgery centers and improving operational efficiency.
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