UBS Reiterates Buy on Tenet Healthcare (THC) After Hosting Management Meetings

UBS maintained a Buy rating on Tenet Healthcare (NYSE: THC), and cut the price target to $51.00 (from $62.00), after meeting with management. THC reiterated that it expects to show solid growth in 2016 relative to its pro-forma 2015 EBITDA run rate of $2.3 bln. Consensus expectations call for just under $2.5 bln in EBITDA in 2016. UBS believes that if THC takes a conservative posture toward 2016, it will offer an EBITDA range of $2.4- 2.5 bln.

Analyst A.J. Rice commented, "We hosted members of Tenet management, Vice Chairman Keith Pitts and CFO Dan Cancelmi, for meetings in the Midwest this week. THC reiterated that it expects to show solid growth in 2016 relative to its pro-forma 2015 EBITDA run rate of $2.3 bln. A number of positives may be under appreciated including the potential benefit over the next two years of the move to the HPG group purchasing platform and the expected margin improvement at two new JV's ($1 bln in revs, one in Arizona and one in Alabama) the company put in place in 2015. THC also expects to realize additional synergies from the Vanguard deal, as well as incremental benefits from the ACA."

For an analyst ratings summary and ratings history on Tenet Healthcare click here. For more ratings news on Tenet Healthcare click here.

Shares of Tenet Healthcare closed at $24.69 yesterday.

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