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Investing.com - Jefferies upgraded Chemed (NYSE:CHE) from Hold to Buy and raised its price target to $550.00 from $490.00. According to InvestingPro data, the company maintains a "GREAT" financial health score, with strong profitability metrics and solid cash flow generation.
The upgrade follows Jefferies’ initial Hold rating issued in July, when the firm expressed concerns about Medicare cap issues and anticipated downward revisions to 2026 Street estimates ahead of second-quarter earnings. While three analysts have recently revised their earnings downward, the company maintains robust fundamentals with a healthy current ratio of 1.86 and operates with moderate debt levels.
Jefferies cited more favorable fiscal year 2026 reimbursement, particularly in Florida, as a key factor behind the rating change, noting this development likely positions 2026 estimated EBITDA at the high end of current Street expectations.
The research firm expects better-than-expected reimbursement rates to drive near-term multiple expansion and stock upside for the healthcare services company.
Jefferies also highlighted Chemed’s aggressive share buyback program as an additional catalyst supporting the more bullish outlook on the stock.
In other recent news, Chemed Corporation reported its second-quarter 2025 earnings, which did not meet analysts’ expectations. The company’s earnings per share were $4.27, falling short of the projected $5.39. Additionally, Chemed’s revenue was $618.8 million, missing the anticipated $650.6 million. These financial results are significant for investors monitoring the company’s performance. Furthermore, in a leadership update, VITAS Healthcare, a subsidiary of Chemed Corporation, announced that Nicholas M. Westfall will step down as chairman and CEO. Joel L. Wherley, previously the president and COO, will take over as the new CEO. These recent developments provide important insights into Chemed Corporation’s current situation and potential future direction.
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