Tenet Healthcare (THC) Stock Forecast & Price Target

Tenet Healthcare is expected to face headwinds due to a ~20% reduction in HIX enrollment, leading to uncertainty over its effectuation and re-enrollment. Despite this, the company's expense actions, such as employee engagement tools and process automation, are expected to offset these challenges. This is reflected in the company's 1Q26 adjusted EBITDA margin of 16.7% and its maintained 2026 guidance, which includes net operating revenue of $21.5B-$22.3B and adj. EBITDA in the range of $4.485B-$4.785B, representing a 20.9%-21.5% adj. EBITDA margin. Through its ambulatory care segment, which saw a 10.6% y/y increase in revenue and 6.1% y/y increase in EBITDA, Tenet is well-positioned for growth opportunities, as evidenced by its over 150 operational robotic surgery programs in its ASCs and recent acquisitions and de novo openings.

Tenet Healthcare is facing various challenges that negatively impacted their financial performance in 1Q26, such as declines in HIX volumes and revenues, and potential pressure on volume and exchange impact for the remainder of the year. While management reaffirmed their guidance for 2026, there are concerns about the impact of regulatory and legislative risks, payor mix, and M&A-related risks on the company's future financial performance and ability to achieve their projected growth targets. Additionally, the company's current multiple of ~6.8x EV/EBITDA is below the 5-year average and our target of ~9.0x, indicating potential undervaluation and poor sentiment towards the stock.