UPDATE: CRT Capital Downgrades Tenet Healthcare on Guidance Concerns, Down 7%
In a report released Tuesday, CRT Capital analyst Sheryl Skolnick downgrades Tenet Healthcare (NYSE: THC) from Buy to Fair Value, decreasing price target from $48 to $41.50.
CRT Capital emphasized, "The stock is too rich, the promise of reform too thin and the execution too variable for us to continue to rate THC shares a 'Buy'."
THC's EBITDA guidance for 1Q14 of $350m-400M decline from the fourth quarter raising much concern. With some more digging CRT Capital reports, "in order to make the midpoint of guidance, unless THC has changed its guidance setting policy, it has to BEAT its own budget and it can only make the low end of guidance if it achieves budget."
The report defends the downgrade by highlighting THC's overwhelming risks ranging from Medicaid/Medicare reimbursements to volume performance and execution.
THC opened Tuesday at $46.26 and is currently trading around $44.72, down seven percent from it's previous close of $48.33.
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