Tenet Healthcare price target raised to $205 from $195 at BofA Securities

Tenet Healthcare (THC) significantly exceeded Q2 2025 expectations, reporting EPS of $4.02 and revenue of $5.27 billion, with adjusted EBITDA reaching $887 million. This strong performance, partly driven by favorable supplemental payments and a strategic shift towards higher-return ambulatory surgery centers, prompted multiple analyst upgrades: BofA Securities raised its price target to $205, Raymond James to $200, and UBS to $238, all reaffirming positive ratings and noting Tenet's conservative guidance. Despite a recent 10% stock decline, analysts view the company's robust financials and strategic direction favorably.

Analysis

Tenet Healthcare (THC) delivered a significant outperformance in its second-quarter 2025 results, prompting multiple analyst upgrades and reinforcing a bullish outlook. The company reported an earnings per share of $4.02, a 39.58% beat over the $2.88 consensus, on revenue of $5.27 billion which also surpassed the $5.16 billion forecast. Adjusted EBITDA of $887 million was notably strong, partly boosted by $79 million in out-of-period supplemental payments. This robust performance led BofA Securities, Raymond James, and UBS to raise their price targets to $205, $200, and $238, respectively, all while maintaining positive ratings. Analysts view the company's upwardly revised guidance as conservative, suggesting further potential upside. The positive thesis is anchored in Tenet's strategic pivot towards higher-margin, faster-growing ambulatory surgery centers (ASCs) and its strong free cash flow generation. Despite this fundamental strength, the stock has recently declined by 10%, which analysts at BofA suggest may present a compelling entry point.

Key Decisions for Investors

• Given the significant earnings beat, conservative forward guidance, and a recent 10% stock price decline, investors could consider the current valuation an attractive entry point for a fundamentally strong company.
• Monitor the ongoing strategic shift towards ambulatory surgery centers (ASCs), as continued growth and margin expansion in this segment are critical to validating the long-term bullish thesis held by analysts.
• Investors should watch for any further upward revisions to guidance in subsequent quarters, as the current outlook is viewed as conservative and continued outperformance could serve as a major catalyst.