Tenet Healthcare (THC) has received a new Buy rating, initiated by Morgan Stanley analyst, Craig Hettenbach.
Craig Hettenbach has given his Buy rating due to a combination of factors that highlight Tenet Healthcare’s strategic positioning and financial improvements. The company has undergone a significant transformation in its business model and balance sheet, which has not yet been fully reflected in its stock valuation. Tenet’s focus on expanding its outpatient services through its USPI business positions it well to benefit from the healthcare industry’s shift towards lower-cost care settings.
Additionally, Tenet has successfully repositioned its acute care portfolio, generating substantial proceeds from asset sales and significantly reducing its net leverage ratio. Despite the stock’s recent underperformance due to uncertainties in healthcare policy and government spending, Hettenbach sees potential for multiple expansion. The company’s leadership in ambulatory surgery centers (ASCs) and its focus on high-growth areas such as orthopedics and cardiology further support the Buy rating, as these factors are expected to drive revenue growth and improve EBITDA margins.
In another report released on March 24, Jefferies also reiterated a Buy rating on the stock with a $185.00 price target.
Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of THC in relation to earlier this year.