Tenet Earnings: Boosting 2023 Outlook on Strong Recent Trends

Tenet turned in strong second-quarter results, and management raised its 2023 outlook to recognize these trends. However, even after making mild adjustments to our near-term estimates on these recent results, our fair value estimate of $95 has not changed materially and still remains moderately above recent share prices. Also, while we have a no-moat rating on the firm, we recognize that Tenet's operations have improved substantially in recent years, and we expect returns on invested capital to remain above capital costs throughout our five-year forecast period.