Chemed (CHE) Stock Forecast & Price Target

Chemed Corp has demonstrated strong performance through its VITAS hospice segment, which is the nation's leading provider and has shown solid demand growth despite temporary challenges, such as competition in the Florida market. The VITAS segment's focus on lower-profit short-stay admissions is anticipated to overcome regulatory limitations and facilitate a rebound in growth starting in 2026, supported by an overall improving economic backdrop. Furthermore, robust margin improvements and stable revenue growth from VITAS, along with strong demand in the Roto-Rooter segment, contribute to a favorable outlook for the company's profitability and overall shareholder value.

Chemed Corp faces significant challenges likely contributing to a negative stock outlook, including anticipated macroeconomic headwinds in 2026 that could lead to a softened consumer demand for its VITAS and Roto-Rooter segments, resulting in FY26 EPS estimates being 10% below targets. Additionally, the Roto-Rooter segment's adjusted EBITDA margin has decreased by 520 basis points year-over-year to 21.8%, affected by rising labor, insurance, and marketing costs, coupled with a 7.2% decline in leads year-over-year in the second quarter. Furthermore, the company's adjusted EPS estimates for FY2025 to FY2027 have been revised downward, indicating ongoing alignment issues with prior guidance and increased exposure to risks associated with government-sponsored programs and discretionary service demand.