Feb. 25 (Bloomberg) -- Tenet Healthcare Corp., the third-largest U.S. for-profit hospital company, declined the most in more than two years after providing a 2014 forecast that was lower than analysts’ estimates.
Tenet fell 9.1 percent to $43.93 at the close in New York, the biggest single-day drop for the Dallas-based company since Dec. 2, 2011.
Earnings before interest, taxes, depreciation and amortization may be $1.8 billion to $1.9 billion this year, the company said yesterday in a statement. Analysts anticipated $1.96 billion, the average of 18 estimates compiled by Bloomberg. The forecast includes expected government reimbursement cuts, Chief Financial Officer Daniel Cancelmi said today on a conference call.
Tenet’s 2014 outlook was cause for “significant concerns,” Sheryl Skolnick, a Stamford, Connecticut-based analyst at CRT Capital Group LLC wrote today in a note to clients. Skolnick, who had estimated 2014 Ebitda of $2.1 billion, lowered her rating to hold from buy.
“The stock is too rich, the promise of reform too thin, and execution too variable for us to continue to rate THC shares a ‘buy,’” she said.
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