’Reddit is built for this moment’ - Stock soars on crushed earnings
Investing.com - Jefferies initiated coverage on Chemed (NYSE:CHE) with a Hold rating and a $500 price target on Friday. The stock, currently trading at $463.02, near its 52-week low, has received mixed signals according to InvestingPro data, which shows the company maintains a GREAT financial health score despite recent market challenges.
The research firm cited concerns about Medicare cap issues, particularly in Florida, that could impact the hospice and plumbing services provider’s growth through 2026.
Jefferies noted these Medicare cap challenges would likely "carry over into ’26 and limit the company’s ability to achieve the Street’s current ’26 EBITDA growth" expectations.
The firm projects 8% EBITDA growth for Chemed in 2026, compared to Wall Street’s more optimistic consensus estimate of 12% growth.
Despite the cautious rating, Jefferies acknowledged it is "big fans of CHE and the hospice space" and credited management for "their track record of execution and capital allocation."
In other recent news, Chemed Corporation has reported weaker-than-expected Medicare admissions in Florida, resulting in projected revenue limitations for its VITAS subsidiary. The company now anticipates a Medicare Cap revenue limitation of $18 million to $25 million for the 2025 government fiscal year, which was not included in previous earnings guidance. Following this development, RBC Capital has adjusted its price target for Chemed from $674 to $640, citing an expected $22 million cap headwind in the VITAS segment during the latter half of 2025.
Meanwhile, BofA Securities has maintained a Buy rating on Chemed with a price target of $708. This decision comes after discussions at the BofA Health Care Conference, where Chemed’s leadership expressed confidence in managing the Medicare cap situation without affecting core growth prospects. Additionally, at Chemed’s recent annual stockholders’ meeting, all nominated directors were elected with a significant majority of votes.
Earlier, RBC Capital had increased Chemed’s price target to $674 from $667 following a strong first-quarter earnings report and a positive outlook for its Roto-Rooter business. The firm’s analyst emphasized the solid performance in the first quarter and the optimistic future for the Roto-Rooter segment. These developments reflect Chemed’s ongoing efforts to navigate challenges while focusing on growth opportunities.
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