Chemed (CHE) Stock Forecast & Price Target

Chemed Corp is poised for a positive outlook driven by solid demand in its VITAS hospice segment, which is the industry's leading provider and has demonstrated strong margin improvements. Despite recent challenges in Florida due to Medicare cap limitations, VITAS has shown resilience with a year-over-year admission increase of 4.9%, positioning itself for a rebound in 2026 as it shifts focus to strategic admissions that mitigate these caps. Furthermore, the strong growth prospects in both the hospice and Roto-Rooter segments, alongside an anticipated improving economic backdrop, suggest ongoing revenue and profitability enhancements for the company.

Chemed Corp faces a negative outlook due to anticipated macroeconomic headwinds, which are expected to weaken consumer demand for both its Roto-Rooter and VITAS segments, resulting in a forecasted FY26 earnings per share (EPS) that is projected to be 10% below previous targets. The Roto-Rooter segment has reported a significant decline in adjusted EBITDA margin, down 520 basis points year-over-year to 21.8%, attributed to escalating labor, insurance, and marketing costs alongside a 7.2% decrease in total leads in the second quarter. Additionally, updated earnings projections have been lowered for FY2025 through FY2027, indicating ongoing challenges that do not align with prior guidance, compounded by risks associated with government reimbursement programs and fluctuating demand for discretionary services during economic downturns.