Chemed (CHE) Stock Forecast & Price Target

Chemed Corp's VITAS segment remains robust, with solid demand for hospice services and a strong market position as the nation's leading hospice provider, despite facing some challenges from heightened competition and state cap limitations. The reported 4.9% year-over-year increase in admissions, coupled with margin improvements, signifies potential for profitability growth as the company prepares for a rebound in 2026 when certain regulatory pressures are expected to ease. Additionally, the Roto-Rooter segment is poised for growth, benefiting from an improving economic backdrop, which further enhances the overall positive outlook for the company's financial performance.

Chemed Corp faces significant headwinds due to anticipated macroeconomic challenges, which are expected to lead to softer consumer demand across both its VITAS and Roto-Rooter segments, projecting a 10% decline in FY26 EPS compared to previous targets. Additionally, the Roto-Rooter segment reported a concerning decline in adjusted EBITDA margin by 520 bps year-over-year, driven by rising labor, insurance, and marketing costs amid weaker volumes and a 7.2% decrease in total leads in Q2. Furthermore, the company has revised its EPS estimates downward for FY2025 through FY2027, indicating deteriorating financial performance and challenges in aligning results with previous guidance.