Chemed (CHE) Stock Forecast & Price Target

Chemed Corp's primary revenue driver, the VITAS segment, remains the nation's leading hospice provider, showcasing strong demand growth despite current competition challenges in the Florida market. The company has demonstrated solid profitability improvements and stable growth, positioning itself favorably within the hospice industry, which benefits from excellent long-term growth prospects and a stable reimbursement outlook. Anticipated strategic shifts towards lower-profit short-stay admissions are expected to enhance growth and profitability in 2026, aligning with an improving economic backdrop that is likely to accelerate revenue growth in both the hospice and Roto-Rooter segments.

Chemed Corp's outlook is negatively impacted by anticipated macroeconomic headwinds that are projected to weaken consumer demand in both the Roto-Rooter and VITAS segments, leading to a forecasted 10% reduction in FY26 earnings per share (EPS). The Roto-Rooter segment has also experienced a significant decline in adjusted EBITDA margin, down 520 basis points year-over-year to 21.8%, primarily due to increased labor, insurance, and marketing costs amidst lower service demand. Additionally, the company's EPS estimates for FY2025, FY2026, and FY2027 have been revised downward, reflecting a poor alignment with prior guidance, further heightening concerns regarding performance stability.