Tenet Healthcare (THC): High-Acuity Expansion Acting As Margin Enhancer – Can they Thrive in a Trump-Led Healthcare Shakeup ?

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Tenet Healthcare delivered a strong Q3 2024 performance, with revenue of $5.12B exceeding expectations by $69.42M and Adjusted EPS of $2.93 surpassing estimates by $0.56. Adjusted EBITDA of $978M (+15% YoY) and a margin of 19.1% (+220 bps YoY) reflect disciplined cost controls, improved payer mix, and operational efficiencies. USPI remains the primary growth engine, with Adjusted EBITDA up 19% YoY and total joint replacement volumes surging 19%, driven by high-acuity cases and favorable pricing trends. Hospital operations also showed resilience, with EBITDA up 11% YoY and admissions growth of 5.2%, supported by investments in procedural hospitals and high-growth markets. Capital allocation remains disciplined, with YTD share repurchases totaling $672M and strategic investments in ambulatory and hospital expansion fortifying growth prospects. Tenet raised its FY24 EBITDA guidance to $3.9–$4.0B (+12% YoY at the midpoint), reflecting robust momentum in USPI and hospital segments. While potential risks include Medicaid payment normalization and a slower pace of low-acuity service migration, Tenet’s positioning in high-acuity, cost-effective outpatient care aligns with long-term structural tailwinds. The key question: Can Tenet’s high-acuity strategy and ASC growth engine continue to outperform amid shifting healthcare policies and a potential Trump-led political environment?

Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures

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