RBC Capital increased its price target for Tenet Healthcare (NYSE: THC) to $253.00 from $252.00 on Tuesday, and left its Outperform rating intact. The price target move was modest in absolute terms, rising by $1, but followed preliminary fourth-quarter disclosures from Tenet that showed adjusted EBITDA landing at the upper end of the company’s guidance range.
RBC highlighted that losing the CommonSpirit Health contract was "not ideal," yet said the cash proceeds tied to terminating that contract and the purchase of CommonSpirit’s equity interest "more than offset the lost contract." The firm maintained that Tenet remains its preferred hospital pick, pointing to lower exchange volume and a comparatively stronger growth outlook for the company.
Separately, Tenet has completed a transaction to regain full ownership of Conifer Health Solutions. Under the terms of the agreement, CommonSpirit will make payments totaling about $1.9 billion to Tenet over the next three years. Conifer itself will pay CommonSpirit approximately $540 million to redeem CommonSpirit’s 23.8% equity stake by January 1, 2026.
Tenet has also issued $2.25 billion in new notes as part of a debt refinancing package. The issuance comprises $1.5 billion of 5.500% senior secured first lien notes due 2032 and $750 million of 6.000% senior notes due 2033. Proceeds from these issues are earmarked to redeem existing obligations, including $1.5 billion of 6.250% senior secured second lien notes due in 2027 and to partially redeem $750 million of 6.125% senior notes due in 2028.
Other analyst moves tracked alongside RBC’s action include TD Cowen trimming its price target on Tenet to $230 from $233 while retaining a Buy rating. Cantor Fitzgerald reiterated an Overweight rating and kept a $245 price target, citing optimism about Tenet’s growth potential and valuation relative to peers. These adjustments and reiterations reflect differing analyst views on Tenet’s valuation and outlook amid the company’s recent strategic and financing activity.
The sequence of developments reported by Tenet and noted by analysts centers on near-term results and capital structure changes: adjusted EBITDA performance in the quarter, the unwinding of the CommonSpirit partnership accompanied by multi-year payments and an equity redemption, and a sizable note issuance intended to refinance existing debt. Analysts continue to monitor these items as they form views on Tenet’s relative positioning among hospital operators.
Summary
RBC Capital nudged up its price target on Tenet Healthcare to $253 and maintained an Outperform rating after the company reported adjusted EBITDA at the top of its guidance range. Tenet regained full ownership of Conifer, will receive about $1.9 billion from CommonSpirit over three years, and finalized a $2.25 billion note issuance to refinance existing debt. Other analysts made smaller target adjustments while keeping generally positive ratings.