Tenet Healthcare (THC) PT Raised to $80 at Jefferies as Guidance Leaves Room for Upside

Jefferies analyst Brian Tanquilut raised the price target on Tenet Healthcare (NYSE: THC) to $80.00 (from $65.00) after the company reported Q1 EBITDA of $777MM (incl $37MM COVID grants) that was $85MM above Street, as the company delivered SS revenue growth of 5.6% (+19.3% Rev/Adj Admission) and strong EBITDA margins (+330 bps Y/Y to 16.3%). Q2 EBITDA was guided to $675-$775MM vs $707MM cons, based on Revs of $4.65-$4.85B (vs. $4.7B Street).

The analyst reiterated a Buy rating, stating "Guidance leaves room for stock-driving upside. While THC's strong Q2 outlook and FY21 guidance raise should drive investor excitement in the stock, we note that mgmt's revised projections seem highly conservative. THC raised its FY21 guidance by an amount less than the combination of the Q1 beat, the Medicare sequester holiday extension benefit, and Q1 CARES grants. Considering above-Street Q2 guidance, continued recovery in non-COVID volumes, and typical seasonality in Q3 and Q4, we see room for meaningful EBITDA upside to 2021 guidance that should translate to sustained stock momentum."

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