Goldman Raising Price Target On Tenet Healthcare

Goldman Sachs is raising its price target on Tenet Healthcare Corp. THC to $6 from $5 and it has a Neutral rating on shares. In a note sent to investors Goldman writes, "We calculate an M&A score as a means of ranking companies under coverage from 1 to 4, with 1 representing high (30%-50%) perceived probability of M&A activity, 2 representing medium (15%-30%) probability, 3 representing low (10%-15%) probability and 4 implying no probability (0%). We then apply an M&A premium to our price targets for companies with a potential M&A score of 1 or 2. Following Community Health's proposed bid to acquire Tenet, we assign a “1” M&A score to THC, and have incorporated an M&A value of $7 (based on Tenet's 3-year median EV/EBITDA multiple of 7X) into our THC price target." Shares of THC closed at $6.65 on Friday.