Tenet Healthcare’s 4Q Profit Tops Analysts’ Estimates; Street Says Buy


Tenet Healthcare posted fourth-quarter results, which exceeded analysts’ expectations. The healthcare provider reported earnings per share (EPS) of $4.72, beating the Street consensus of $1.70.

During the fourth quarter, Tenet’s (THC) revenue increased 2.3% year-on-year to $4.91 billion, topping analysts’ estimates of $4.89 billion. The company reported net income of $414 million after a net loss of $3 million in the year-ago period.

Additionally, Tenet announced plans to retire $478 million of debt, which will result in lowered interest payments of about $33 million.

Hospital segment revenues rose to $4.06 billion in 4Q from $3.98 billion year-on-year. The increase was attributable to higher patient acuity and rate increases.

Tenet CEO Ronald A. Rittenmeyer noted the challenging business environment in 2020 and said that the company will focus on advancing top-tier clinical programs and will target high growth, low cost of care settings.

Looking ahead, Tenet forecasted first quarter revenue to be in the range of $4.6 billion to $4.8 billion and adjusted diluted earnings per share to be in the range of $0.23 to $0.93. (See Tenet stock analysis on TipRanks)

For fiscal 2021, the company expects revenues to be in the range of $19.2 billion to $19.6 billion and adjusted diluted earnings per share land between the range of $3.52 to $4.81.

This month, UBS analyst Whit Mayo reiterated Buy rating on the stock and raised the stock’s price target from $37 to $60 (16.3% upside potential). Whit sees a positive earnings revision cycle for the stock in 2021 and expects the company to generate 30% to 40% of its market cap in cash over the next two years.

The rest of the Street is bullish about the stock with a Strong Buy consensus rating. That’s based on 9 Buys and 2 Holds. The average analyst price target of $53.18 implies 3.06% upside from current levels.  That’s after shares rallied 56% over the past year.

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