Tenet Healthcare shares rise on analyst comments

AP News
Posted: Dec 03, 2009 4:23 PM

Shares of hospital operator Tenet Healthcare Corp. rose Thursday following positive comments from analysts, including one who upgraded the stock to "Buy."

Shares of the Dallas company are down 26 percent from their high price for the year. But Soleil Securities analyst Albert Rice said Tenet has posted two strong quarters of growth, and good cost control, and is getting its debts under control. Raymond James analyst John Ransom said the shares are down to a fair price.

Rice upgraded Tenet shares to "Buy" from "Hold," and Ransom maintained an "Outperform" rating. In afternoon trading, the stock gained 22 cents, or 4.7 percent, to $4.95.

"Tenet's operational turnaround has gained traction over the course of the year," Rice said. "Despite the strong recent results and management's generally positive outlook, the shares have traded down substantially since the company's third quarter report."

Ransom said Tenet stock does not appear to be down for a specific reason, although he noted that investors have been selling off shares of stocks that benefited from this year's flu season. He said Wall Street views of the hospital industry may have turned more negative because COBRA subsidies that were attached to the economic stimulus package are began to expire.

He added that the Senate health care reform bill would not allow uninsured Americans to get coverage through an insurance exchange until 2014. The House passed a bill that would set up the exchange in 2013.

Tenet stock set an annual high of $6.39 on Oct. 21, and has traded as low as 78 cents in the last year.