Tenet Healthcare (THC) Stock Forecast & Price Target

Tenet Healthcare is supported by a resilient operating model that delivered 1Q26 adjusted EBITDA of $1.162 billion, roughly flat year over year and about 4% above Street expectations, despite revenues coming in slightly below consensus and Hospital segment EBITDA still rising 8% above Stephens on strong pricing and expense control. Its positive outlook is further reinforced by the faster-growing, higher-margin, capital-efficient USPI ambulatory platform, which grew EBITDA 6% year over year, alongside evidence of disciplined capital deployment, including share repurchases and $125 million of USPI development, and management’s reaffirmation of 2026 revenue and EBITDA guidance while lifting adjusted EPS to $16.38 to $18.68. Even with HIX volumes down 9% in 1Q and policy-related uncertainty around Medicaid and ACA subsidies, the company’s ability to flex costs, preserve margins, and generate significant free cash flow suggests meaningful underlying earnings power and a valuation that remains attractive relative to its historical EV/EBITDA range.

Tenet Healthcare is viewed negatively because its 2026 outlook already embeds about a $250 million full-year headwind from an expected ~20% reduction in HIX enrollment, reflecting limited visibility into effectuation and re-enrollment, while additional downside is possible if Medicaid work requirements, eligibility checks, or OBBBA-related provider tax and SDP changes pressure results in 2027 and 2028. Although 1Q26 was solid in USPI with EBITDA of $484 million on revenue of $1.32 billion and same-facility surgical revenue up 5.3% driven by 5.6% pricing, margins still came in at 36.7% versus an expected 37.8%, cases were down 0.3%, and winter storms and a higher mix of consolidated centers complicated the operational picture. The company maintained 2026 guidance despite a roughly $50 million beat, but that conservatism underscores an earnings profile vulnerable to volume pressure, weakening high-acuity demand, rising labor and inflationary costs, and potential margin compression that could limit free cash flow and capital deployment even as management pursues offsetting expense actions and acquisitions.