Wells Fargo Upgrades Tenet Healthcare (THC) Stock, Raises PT

On May 29, Wells Fargo upgraded Tenet Healthcare Corporation (NYSE:THC)’s stock to “Overweight” from “Equal Weight” with a price objective of $195, up from the prior target of $150, as reported by The Fly. The firm has become more constructive on the hospital group and opines that the policy risks have now receded after the House passed the budget reconciliation legislation.

A room full of medical personnel collaborating on a treatment plan for a patient.

However, the legislation is expected to face changes in the Senate and will be required to be passed again by the House. That being said, Wells Fargo contends that healthcare spending cuts are expected to not worsen. While the coverage impacts might be a headwind, the firm believes that they will be manageable.

In Q1 2025, Tenet Healthcare Corporation (NYSE:THC)’s adjusted EBITDA sat at $1.163 billion as compared to $1.024 billion in Q1 2024. This reflects healthy growth in same-hospital admissions and ambulatory net revenue per case, favorable payer mix, and disciplined expense management. Its net operating revenues came in at $5.2 billion.

Tenet Healthcare Corporation (NYSE:THC)’s Q1 2025 results were aided by fundamental continued strength in the same store revenue growth because of customer demand, high acuity, and effective cost management.

Tenet Healthcare Corporation (NYSE:THC) sees strong opportunity for M&A in the ambulatory space and has plans to invest a baseline of ~$250 million in this opportunity each year. During Q1 2025, the company added 6 new centers, which includes a strategic partnership with ChoiceCare Surgery Center in Midland, Texas.

While we acknowledge the potential of THC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than THC and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.