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Investors have an opportunity to buy into Tenet Healthcare right now as the company evolves, according to Morgan Stanley. Analyst Craig Hettenbach initiated the health care services stock with an overweight rating. Hettenbach’s $165 price target implies 26.2% upside from Tuesday’s close. Despite political uncertainty weighing on the stock, Hettenbach said the company should be boosted by a shift toward outpatient care and lower-cost services. “A significant business model and balance sheet transformation has yet to be captured in THC’s multiple,” Hettenbach wrote to clients in a Wednesday note. “Risks of government spending cuts likely remain an overhang near term, providing entry points for patient investors in what should emerge as a much cleaner story and durable business.” Specifically, the analyst said Tenet is expanding and leveraging its USPI business, which has ambulatory and surgical offerings. That’s done in part through tuck-in acquisitions, he said. On top of that, Hettenbach said Tenet is a leader within the ambulatory surgery center space and is the “largest provider in a fragmented market.” Because of that, he thinks the Texas-based company can see tailwinds. Elsewhere, Hettenbach said that Tenet could pick up its pace for stock buybacks as free cash flow improves and the balance sheet grows stronger. Shares have climbed more than 3% in 2025, bucking the downtrend seen in the broad market this year. With this call, Hettenbach joins the majority on Wall Street with a buy-equivalent rating, per LSEG. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
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