Shares of hospital operator Tenet Healthcare Corp. (THC) are higher by more than 6% in pre-market trading on Monday on news the company is creating a $2.6 billion joint venture with United Surgical Partners International.
Dallas-based USPI is controlled by private equity firm Welsh, Carson, Anderson & Stowe.
Under the terms of the agreement, Tenet will initially own 50.1% of the joint venture while Welsh Carson and the other existing investors in USPI will initially own the remaining 49.9%. Tenet said it will have a path to full ownership of USPI over the next five years through a put/call structure.
On valuation measures, Tenet Healthcare Corp. shares are currently priced at 410.08x this year’s forecasted earnings compared to the industry’s 27.84x earnings multiple. Ticker has a PEG and forward P/E ratio of 1.53 and 18.51, respectively. Price/Sales for the same period is 0.30 while EPS is $0.12. Currently there are 10 analysts that rate THC a ‘Buy’, 9 rate it a ‘Hold’. No analyst rates it a ‘Sell’. THC has a median Wall Street price target of $56.00 with a high target of $85.00.
In the past 52 weeks, shares of Dallas, Texas-based company have traded between a low of $37.95 and a high of $63.61 and are now at $52.65. Shares are up 22.37% year-over-year ; down 2.07% year-to-date.