Chemed (CHE) Stock Forecast & Price Target

Chemed Corp operates two prominent segments—VITAS and Roto-Rooter—with VITAS being the primary revenue driver and a leader in the hospice industry, demonstrating solid long-term growth prospects and stable reimbursement expectations. Despite recent challenges in the Florida market, VITAS has shown resilience with a year-over-year admissions increase of 4.9% and is set to rebound in 2026, focusing on a strategy that addresses market competition. The overall demand for services from both segments remains strong, bolstering the company’s outlook for future profitability and growth.

Chemed Corp faces significant financial challenges that contribute to a negative outlook for its stock, primarily due to anticipated macroeconomic headwinds that are expected to soften consumer demand within its Roto-Rooter and VITAS segments. The adjusted EBITDA margin for Roto-Rooter experienced a notable decline of 520 basis points year-over-year to 21.8%, attributed to increased labor, insurance, and marketing costs compounded by a 7.2% decrease in total leads year-over-year in the second quarter. Additionally, the revision of fiscal year earnings per share estimates for 2025 through 2027 reflects a downward adjustment, with projected EPS decreasing from prior estimates, highlighting ongoing operational and market pressures.