Tenet Healthcare Corp (NYSE: THC) crashed a 52-week low on Friday after reporting a weak Q3 and lowering its outlook for the full financial year.
Tenet to buyback shares
On the plus side, the healthcare services company announced a $1.0 billion share repurchase programme. In the earnings press release, CEO Saum Sutaria said:
Our business continues to generate strong free cash flow, enabling us to authorise a share repurchase programme that balances our uses of capital with investments to grow the business and debt retirement.
But investors seem to have discounted that authorisation.
The sell-off, though, might have created an attractive opportunity to invest in this stock considering the Wall Street has a consensus “buy” rating on it. The average price target on Tenet Healthcare Corp is $92 that represents more than a 100% upside from here.
Tenet Healthcare Q3 results
- Earned $131 million versus the year-ago $449 million
- Per-share earnings fell sharply from $4.13 to $1.16
- On an adjusted basis, earned $1.44 per share
- Revenue slid 2.0% year-on-year to $4.80 billion
- Consensus was $1.24 a share on $4.81 billion revenue
Tenet Healthcare future outlook
For the full year, Tenet now forecasts $5.88 to $6.42 of adjusted EPS on $19 billion to $19.2 billion in revenue. In comparisons, analysts had called for $6.38 a share and $19.27 billion of revenue.
Its Q4 guidance was also below the Street expectations. CEO Sutaria also said:
During Q3, we worked to continue to recover from our cyberattack and dealt with a very active COVID spike among our employees, but the operating discipline across our business units allowed us to adapt to the environment.
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