Tenet Healthcare Downgraded by Wolfe Research: A Shift in Market Expectations

Wolfe Research has downgraded Tenet Healthcare (THC) from "Outperform" to "Peer Perform", indicating a shift in the assessment of THC's future performance relative to its peers. No changes have been made to the company's price target, and investors will be observing THC's performance closely. Based on 22 analysts' one-year price targets, the average target price is $195.24, implying an upside of 27.59% from the current price.

Wolfe Research has revised its rating for Tenet Healthcare (THC) from "Outperform" to "Peer Perform," signaling a change in the assessment of THC's future performance relative to its peers. The decision was made without altering the company's price target. The downgrade is primarily due to anticipated challenges from healthcare exchange pressures expected in 2026 and provider tax pressures projected to impact the company from 2028 onwards. These legislative pressures have led Wolfe Research to perceive a less attractive risk/reward scenario for THC's shares.

Wall Street analysts forecast a one-year price target of $195.24 for Tenet Healthcare Corp (THC), with estimates ranging from $159.00 to $238.00. This average target implies an upside of 27.59% from the current price of $153.02. The consensus recommendation from 24 brokerage firms is currently 1.9, indicating an "Outperform" status.

Despite the downgrade, Tenet Healthcare has reported strong second-quarter 2025 results, significantly surpassing earnings and revenue forecasts. The company posted an earnings per share (EPS) of $4.02, exceeding expectations of $2.88, and revenue of $5.27 billion, outperforming projections of $5.16 billion. Following these results, several analyst firms have adjusted their outlook on Tenet Healthcare, reflecting a positive sentiment. BofA Securities raised its price target to $205, UBS increased it to $238, and Raymond James set a new target of $200.

Cantor Fitzgerald also raised its price target on THC to $190.00 from $177.00, maintaining an Overweight rating. The firm noted that while the company’s recent conference call lacked encouragement, Tenet’s guidance implied improvement in several areas, including hospital margins, resolution of volume pressure, better tax situation, and share count adjustments. However, the firm believes investors are seeking clearer catalysts as the stock faces potential pressures from enhanced subsidies expiring on December 31, 2025, and upcoming OBBB changes in 2027/2028.

Guggenheim analyst Jason Cassorla has increased the price target for Tenet Healthcare from $180 to $188, maintaining a Buy rating. Cassorla suggests that a standardized multiple based on projected 2026 figures points to a promising potential for further gains in THC shares.

References:
[1] https://www.gurufocus.com/news/3007665/wolfe-research-downgrades-tenet-healthcare-thc-amid-legislative-concerns
[2] https://za.investing.com/news/analyst-ratings/tenet-healthcare-stock-price-target-raised-to-190-from-177-at-cantor-fitzgerald-93CH-3800622
[3] https://www.investing.com/news/earnings/tenet-healthcare-shares-rise-over-2-as-q2-earnings-soar-past-estimates-93CH-4145603
[4] https://www.gurufocus.com/news/2997132/tenet-healthcare-thc-price-target-raised-by-analyst-thc-stock-news