Tenet Healthcare downgraded to Equal Weight from Overweight at Wells Fargo

Wells Fargo analyst Stephen Baxter downgraded Tenet Healthcare (THC) to Equal Weight from Overweight with a price target of $150, down from $205. The firm cut out-year estimates for the hospitals to reflect its assumption that enhanced exchange subsidies will expire. Current policy and fiscal uncertainty warrant lower multiples in the group, the analyst tells investors in a research note. Wells sees the extension of enhanced exchange subsidies as unlikely following the Republican sweep. Assuming the expiration of enhanced subsidies was a 50% probability before the election and a 100% probability now, the group multiples are little changed since the election, contends Wells. It expects “uncertainty to remain high for some time.”