Tenet Turns In Solid Q4, Guides as Expected; Shares Still Undervalued

Tenet Healthcare turned in solid fourth-quarter results that helped it exceed 2022 expectations. Management also provided 2023 goals that appear roughly in line with our expectations. At first glance, we see no reason to adjust our $95 fair value estimate. We continue to view the shares as undervalued even when considering our Very High Uncertainty Rating. While our moat rating remains none, 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.