Dallas-based Tenet Healthcare’s outlook has been revised to positive from stable, by Fitch.
The raised outlook reflects the for-profit system’s improving competitive position, Fitch said in a Nov. 3 report. Tenet’s hospital and ambulatory care segments have posted “robust” EBITDA growth over the past two years, and its hospital business is also expanding margins.
Tenet sold 14 hospitals in 2024, which Fitch said helped fund a $2.1 billion reduction in the system’s debt.
Fitch said it sees secular tailwinds for, and continuing investment in, ASCs, driving at least mid-single-digit growth in the system’s consolidated EBITDA.The health system’s ambulatory business segment, United Surgical Partners International, has interests in 530 ASCs (398 consolidated) and 26 surgical hospitals (eight consolidated) in 37 states.
Tenet said on its Oct. 28 earnings call that it is now expecting to invest between $875 million and $975 million in capital expenditures in 2025. CFO Sun Park said growing USPI through M&A remains a top capital investment priority.
“Fitch assumes Tenet will allocate its capital prudently, balancing its top objectives of expanding via M&A and de novo development and returning capital to shareholders, with balance sheet management at least limiting EBITDA leverage to 4.5x,” the ratings agency said in its report.
Tenet has a “BB-” rating with Fitch.
