Chemed (CHE) Stock Forecast & Price Target

Chemed Corp's VITAS segment, the nation's leading hospice provider, demonstrates solid long-term growth prospects with an emphasis on profitability improvements and stable reimbursement outlooks, despite facing temporary headwinds in Florida due to Medicare cap limitations. Admissions within VITAS grew by 4.9% year-over-year, indicating steady demand even in a competitive market, while management's strategies position the firm for a rebound in 2026. Additionally, the Roto-Rooter segment contributes to Chemed’s positive outlook through robust service demand, underscoring the overall strength of the company's diversified business model.

Chemed Corp faces significant macroeconomic headwinds projected to continue into 2026, which are expected to exert downward pressure on revenue and earnings per share, with FY26 EPS anticipated to be 10% below prior targets. The Roto-Rooter segment has experienced a marked decline in adjusted EBITDA margins, down 520 basis points year-over-year to 21.8%, primarily due to rising labor and insurance costs alongside lower lead generation. Overall, the company has revised its EPS estimates for FY2025/2026/2027 downward, reinforcing concerns over alignment with earlier guidance and exposing vulnerabilities to Medicare Cap risks in the hospice business and reduced demand for discretionary plumbing services.