Credit Suisse: A Beaten Down Tenet Healthcare 'Still Strong'

Tenet Healthcare Corp (NYSE: THC) shares are down more than 10 percent year-to-date despite a favorable outlook, an analyst said Tuesday.

Worries regarding a pending Supreme Court decision on the Affordable Care Act, as well as unmet high expectations have pressured the hospital chain since it pre-announced fourth-quarter earnings last month.

On Monday, Tenant reiterated its outlook and posted results in line with expectations.

But Credit Suisse's Ralph Giacobbe reiterated a Buy recommendation on Tenant and said that despite its recent stock market performance, Tenant's underlying trends remain strong.

Giacobbe cited Tenant's admissions growth of 3.5 percent last year, versus an average of 1.3 percent for industry peers.

But the analyst cut his price target 11 percent to $56 and lowered his 2015 earnings estimate to $1.70 a share, citing additional costs.

Morgan Stanley's Andrew Schenker maintained an Equal-Weight rating following Tenant's fourth-quarter earnings release.

But Schenker said the company's outlook issued in January may not include a more recent enrollment acceleration in federally sponsored healthcare insurance exchanges, nor an extension of the annual open enrollment period announced last week.

Schenker said benefits to Tenant from healthcare reform will be greater than it's forecasting, and said additional benefits may come from acquisitions.

Among 19 analysts who follow Tenant, 11 rate the stock at Buy, one at Overweight and seven at Hold, according to FactSet.