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Tenet Healthcare Corp THC

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Tenet Offers Stronger 2021 Outlook Than We Anticipated; Raising Our Fair Value

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Tenet turned in strong fourth-quarter results and delivered 2021 guidance that exceeded our previous expectations, especially in terms of cash flow. Considering this strong outlook and continued focus on deleveraging, we have raised our fair value estimate to $37 per share from $28 previously. However, shares still remain above that, and we continue to see extreme uncertainty around the valuation scenarios of this highly leveraged, no-moat hospital operator.

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Company Profile

Business Description

Tenet Healthcare is a Dallas-based healthcare provider organization operating a collection of hospitals (65) and many outpatient facilities, including ambulatory surgery centers, urgent care centers, freestanding imaging centers, freestanding emergency rooms/micro-hospitals, and physician practices across the United States. Tenet enjoys the number-one ambulatory surgical center position nationwide through its nearly full stake in United Surgical Partners International.

14201 Dallas Parkway, Suite 1400
Dallas, TX, 75254
T +1 469 893-2200
Sector Healthcare
Industry Medical Care Facilities
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 110,000