Tenet Healthcare (THC) shares surged 23% during Friday's trading session, potentially marking the stock's largest single-day rally since February. The sharp advance came after the company reported second-quarter earnings that comfortably exceeded Wall Street expectations and issued a substantially upgraded annual outlook.

Tenet's Q2 Performance

The healthcare provider posted second-quarter adjusted earnings of $6.12 per share, well above the analyst consensus estimate of $4.26. Total operating revenue rose 6.8% year-over-year to $5.63 billion, surpassing the anticipated $5.43 billion.

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Management raised its full-year adjusted EPS guidance to a range of $20.30 to $21.69, up significantly from the prior outlook of $16.38 to $18.68. The company also lifted its annual net operating revenue guidance to $21.9 billion–$22.5 billion, compared with the previous range of $21.5 billion–$22.3 billion.

The midpoint of the revised forecasts exceeds analyst expectations, which had called for earnings of $17.94 per share on revenue of $21.97 billion.

HCA Healthcare Reports Same Day with More Subdued Reaction

HCA Healthcare also released its quarterly results on the same day, but the market response was far more muted. HCA shares gained 3.7%, a small fraction of Tenet's surge. The limited reaction was largely due to the fact that HCA had already disclosed its second-quarter performance on July 14, leaving Friday's formal release with little new information for investors.

HCA reported second-quarter adjusted earnings of $7.59 per share, edging past the $7.56 estimate. Revenue grew 9% to $20.23 billion, above the $19.76 billion consensus. However, a significant $400 million net gain from Medicaid supplemental payments provided a notable boost to these figures. Adjusting for that benefit, the underlying results were less robust.

HCA also noted an increase in uninsured patient volumes during the quarter, partially linked to a broader loss of exchange-based insurance coverage. Management estimated this trend reduced pre-tax income by approximately $400 million.

HCA Lowers Annual Guidance

HCA lowered its full-year EPS forecast to $28.70–$30.50, down from the prior range of $29.10–$31.50. The company narrowed its revenue guidance to $77 billion–$79.5 billion, compared with the previous $76.5 billion–$80 billion range.

The S&P 500 posted a modest decline on Friday, making Tenet's 23% rally particularly notable against the broader market backdrop.

Barclays Raises Tenet Price Target

Barclays raised its price target on Tenet to $271 from $240 while maintaining its Overweight recommendation. The firm stated that Tenet's second-quarter results "stand out and reinforce the case for a premium valuation," particularly in light of guidance reductions from competing hospital operators.

Tenet's extensive ambulatory surgery center platform continues to serve as a key competitive advantage. While both Tenet and HCA operate hospitals and outpatient facilities across the country, Tenet has greater exposure to its surgery center operations, which have consistently delivered strong margins. Ambulatory surgery centers generally offer lower-cost, higher-margin procedures compared to inpatient hospital settings, making them a strategic growth area as insurers and policymakers push toward value-based care.

Barclays' revised $271 price target implies additional upside potential even after Friday's substantial post-earnings move.