J.P. Morgan Overweight On Tenet Healthcare Corporation (THC)

J.P. Morgan Chase & Co. is Overweight on Tenet Healthcare Corporation THC, and it has a $8 price target on shares. In a note to clients, J.P. Morgan writes, "Shares of Tenet trade at 6.0x and 5.7x enterprise value to our respective 2011 and 2012 EBITDA outlooks, compared to the acute care group average at 6.5x '11E and 6.2x '12E and the historical average for the acute care group at about 7.5x. Notably, the company's EBITDA margin, based upon our estimate of 11.4% in 2010, runs well below our 14% average expectation for the other publicly traded hospitals. Our December 2011 price target at $8/share is derived by applying a 7x EV/EBITDA multiple to our 2012 EBITDA estimate, about in line with our group average objective." Shares of THC gained 9 cents yesterday to close at $4.68, a gain of 2%.