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Tenet Healthcare (NYSE:THC) Stock Sinks on Weak Outlook
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Tenet Healthcare (NYSE:THC) Stock Sinks on Weak Outlook

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Tenet Healthcare exceeded analysts’ third-quarter earnings consensus, but its stock plunged due to the company’s weak Q4 outlook.

Tenet Healthcare (NYSE:THC) reported better-than-expected earnings for the third quarter. However, the company’s fourth-quarter outlook fell short of expectations. Tenet’s Q3 revenue declined 1.9% to $4.80 billion, while adjusted earnings per share (EPS) fell almost 28% to $1.44. Analysts were expecting an adjusted EPS of $1.24 on revenue of $4.81 billion.

Shares of the hospital and healthcare facilities operator plunged nearly 17% in Friday’s pre-market trading session in reaction to the poor outlook. Tenet’s Q3 performance was impacted by a spike in COVID-19 cases among its workforce.

Meanwhile, the company expects its Q4 revenue to be in the range of $4.816 billion to $5.016 billion and adjusted EPS of $1.00 to $1.54. Analysts pegged Q4 revenue at $5.04 billion and adjusted EPS at $1.80.

For the full year, Tenet projects adjusted EPS between $5.88 to $6.42 and revenue in the range of $19 billion to $19.2 billion. Analysts’ full-year projections were for EPS of $6.38 and revenue of $19.3 billion.

Meanwhile, the company announced a $1 billion share repurchase program. Tenet will provide more details about its Q3 performance and outlook via its earnings conference call scheduled for Friday morning.  

Is THC Stock a Buy?

Tenet commands the Street’s Strong Buy consensus rating backed by 11 unanimous Buys. The average THC stock price target of $95.73 implies 76.2% upside potential from current levels. Tenet Healthcare stock has plunged 33.5% year-to-date.

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