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| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 15.35% |
| TRI TECH HOL | TRIT | 8.82% |
| A M R CP | AAMRQ | 8.29% |
| JAZZ PHARMAC | JAZZ | 6.63% |
| SANTARUS INC | SNTS | 5.29% |
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On Jan 22, 2013, we upgraded Tenet Healthcare Corporation ( THC - Analyst Report ) to Outperform from Neutral based on increasing operating revenues and growth through acquisitions. Moreover, the recent strategic plans of this health care services company are expected to generate growth, enhance capital structure and boost shareholder value.
Why the Upgrade?
Tenet Healthcare has been consistently growing its operating revenues since 2006. Additionally, the company has been steadily expanding its operating capacity via acquisitions and alliances. The renewal of the service contract with Cigna Corp. ( CI - Analyst Report ) in the second half of 2012 is also important for Tenet Healthcare as it is one of the largest contracts owned by it.
The Zacks Consensus Estimate for Tenet Healthcare’s fourth-quarter 2012 revenue stands at $2.52 billion, indicating a 5% improvement over the year-ago quarter.
Moreover, Tenet Healthcare is trying to enhance business growth and optimize capital structure through financial and strategic plans comprising acquisitions, share repurchases, debt repayment and a reverse stock split. While the acquisitions will be directed toward strengthening the company’s main business lines, the issue of new debt has already boosted financial flexibility and improved the debt maturity profile.
Going forward, the planned share buyback will enhance earnings per share and boost shareholder value. Thus, we believe that the plan will be beneficial for the company.
We expect Tenet Healthcare to generate a 74.3% improvement in earnings per share in the fourth quarter of 2012 over the prior-year quarter. Consequently, the Zacks Consensus Estimate stands at 70 cents per share. This healthcare service provider, which carries a Zacks Rank #3 (Hold), is yet to announce the date for its fourth-quarter earnings release.
Other Stocks to Consider
Other stocks in the medical sector that are currently performing well include Acadia Healthcare Company, Inc. ( ACHC - Snapshot Report ) – Zacks Rank #1 (Strong Buy) and MEDNAX, Inc. ( MD - Snapshot Report ) – Zacks Rank #2 (Buy).
Read the full reports :
Analyst Report on THC
Snapshot Report on ACHC
Analyst Report on CI
Snapshot Report on MD