Chemed (CHE) Stock Forecast & Price Target

Chemed Corp demonstrates a positive outlook as it operates in the growing hospice industry through its VITAS segment, which remains the nation's leading hospice provider with strong long-term growth prospects and a stable reimbursement outlook. Despite recent challenges with admissions growth due to competitive pressures in Florida, VITAS has shown resilience by improving profitability through strong margin enhancements and reclaiming growth momentum expected in 2026. The Roto-Rooter segment also contributes to the company's strength, with solid demand growth anticipated across both key segments, positioning Chemed for potential outperformance in the market.

The financial outlook for Chemed Corp appears negative, primarily due to anticipated macroeconomic headwinds that may lead to decreased consumer demand, particularly impacting both the VITAS and Roto-Rooter segments, with projected FY26 earnings per share estimates being 10% below earlier targets. Additionally, the Roto-Rooter segment experienced a significant decline in adjusted EBITDA margin of 520 basis points year-over-year, largely attributed to increased labor, insurance, and marketing costs against a backdrop of reduced leads, which fell 7.2% year-over-year in the second quarter. Furthermore, the company has revised its earnings per share estimates downward for the upcoming years and faces inherent risks associated with its hospice business exposure to Medicare caps and potential declines in discretionary plumbing service demand amid economic downturns.