Credit Suisse Group Ups Tenet Healthcare to Outperform
Credit Suisse Group upgraded Tenet Healthcare (THC) to outperform from neutral, betting that the hospital operator will resolve its litigation challenges in 2006.
Tenet said in late January that it would pay $215 million in cash to settle with investors who had brought securities class-action litigation against it. Other litigation is pending.
Analyst Glenn Santangelo assumes that Tenet will resolve such matters in 2006, setting the foundation for the company's two to three year operational recovery period. The analyst believes that even slight improvement in the company's margins would translate into significant earnings leverage. Santangelo has an $11 stock price target.