Tenet Healthcare falls as analyst lowers rating

NEW YORK (AP) -- Tenet Healthcare's stock declined Wednesday as an analyst downgraded the hospital operator's rating, saying its stock price is no longer compelling compared with its peers.

John Ransom of Raymond James said in a client note that Tenet is trading at a similar valuation to HCA Holdings but isn't performing like its larger rival. The analyst said that recent same-facility admissions and adjusted admissions growth at HCA has significantly outpaced Tenet, adding that he doesn't see a reason why this would meaningfully change as the new year starts.

Same-facility admission measures admissions at hospitals that have been open at least a year, stripping out the impact of locations that have recently opened or closed.

Ransom said that he also thinks volume weakness is likely to continue, as Tenet invests more in physician employment.

The analyst lowered Tenet Healthcare Corp. to "Market Perform" from "Outperform" and suspending its $50 price target.

A representative for Tenet said the company does not comment on analyst reports. The Dallas-based company operates 77 hospitals and 177 outpatient centers nationwide.

Tenet's shares fell $1.19, or 2.6 percent, to $44.90 in afternoon trading.