Tenet Healthcare shares lifted by analyst upgrade
Shares of Tenet Healthcare Corp. jumped after an analyst upgraded the stock. Since late 2007, Tenet has signed new contracts with health insurers including Cigna Corp., Aetna Inc. and UnitedHealth Group Inc., giving patients covered by those insurers access to Tenet's hospitals. Lehman Brothers analyst Adam Feinstein said those contracts should improve prices, capping a turnaround that has seen Tenet resolve investigations, eliminate weak hospitals and post better growth.
Feinstein, who upgraded the stock from, "Overweight" from "Equal weight," said Tenet should be able to increase its profit margins and its patient admissions, where there is significant room for improvement. He wrote that for the first time in six years, Tenet is looking to grow instead of just surviving, and the stock price is attractive.
He believes the company is on track to meet its annual forecast, which ranges from a loss of 10 cents per share to a profit of 5 cents per share. Wall Street analysts, on average, expect Tenet to break even for the year.
Before the fourth quarter of 2007, Tenet's patient admissions had been flat or down for almost four years.
Shares gained 39 cents, or 7.4 percent, to $5.69. The stock has traded between $3.06 and $7.05 over the last year, but is far below its peak price of $52.50 in October 2002.
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