THC
Tenet Healthcare Corporation
$173.78
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 31.7% below fair value
You pay
$173.78
Bear
$203.51
Fair
$254.38
Bull
$305.26
Bear
$203.51
+17.1%
$16.81 × 12x P/E
Fair
$254.38
+46.4%
$16.81 × 15x P/E
Bull
$305.26
+75.7%
$16.81 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
10.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $259.50 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $254.38 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples