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Goldman Sachs Upgrades Tenet Healthcare (THC) to Buy

October 8, 2013 7:17 AM EDT Send to a Friend
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Price: $61.18 --0%

Rating Summary:
    13 Buy, 10 Hold, 0 Sell

Rating Trend: = Flat

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Goldman Sachs upgraded Tenet Healthcare (NYSE: THC) from Neutral to Buy with a price target of $55.00 (from $47.00), calling it one of the top hospital picks due to solid growth profile and potential upside.

"Our estimates assume a strong inpatient and outpatient revenue growth driven by pricing and admissions," analyst Brian Zimmerman comments. "We also expect significant growth in the company’s Conifer business driven by contract wins. Our estimates include benefits from the recently-closed VHS acquisition, which we believe could be a key source of upside in the near term. Longer term, we expect the VHS acquisition to be a strategic positive for the company, as it expands THC’s presence in new markets and provides opportunities to realize synergies via cost management, use of Conifer’s business solutions and supply chain management."

He added, "additionally, we view THC's commentary on exchange pricing as positive given it is closer to high-paying commercial rates."

The firm trimmed FY 2013 EPS from $2.28 to $2.27, FY 2014 EPS was raised from $3.20 to $3.84 and FY 2015 was raised from $3.79 to $5.20.

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 $46.10 yesterday.




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