Tenet Healthcare Corp.: Model Update Following Q126 Results

Research evidence excerpt

Tenet Healthcare Corp.: Model Update Following Q126 Results

Deutsche Bank

Research

North America Company Date

21 May 2026

High Yield Corporates Tenet Healthcare

Healthcare

Corp.

Model Update Following Q126 Results

Miles Highsmith

Summary and Recommendation Research Analyst

We rate THC’s 1L bonds Buy as a defensive investment and we rate the unsecured +1-212-250-1606

bonds remains Hold. THC once again posted very solid results in Q126. Net leverage

was 2.2x for LTM 3/31/26. For 2026 we project THC’s net leverage would be 2.3x (we

model continued share repurchases). Although there are investor concerns around

Medicaid cuts, commercial payor pressure, and the full year impact of lower

exchange volumes, we believe THC is somewhat better insulated from these items

through the diversity of its ASC business (47% of consolidated EBITDA guidance for The downside risks to the secured and

2026 based on the mid-points). We also note that the bulk of the Medicaid unsecured bonds are largely centered

around regulatory and legislative reductions per OBBBA don’t kick in until 1/1/28, and this leaves time for mitigants

uncertainty, interest rate movements, and

via legislation and regulations, and we also believe commercial rate increases to a lesser degree broader industry trends

between now and then can help lessen the impact. We broadly believe THC has a and operating results. The upside risks to

solid hospital footprint with strong local market share. It’s also our view that THC the unsecured bonds are mainly

is well positioned as a diverse operator. We believe that hospital and ASC divisions operational and regulatory/legislative in

nature. If THC outperforms operationally, if are important to each other for multiple reasons, and as such we suspect it’s a lower