CHE Should I Buy
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Chemed Corp (CHE) is not a strong buy at this time for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. While the company has positive catalysts such as a stock buyback program and stable dividends, the recent downgrade by analysts, declining financial performance, and hedge fund selling indicate caution. The technical indicators and options data suggest no strong momentum or sentiment to support a buy decision currently.
The MACD histogram is positive at 2.836, indicating bullish momentum, but it is contracting, suggesting weakening strength. RSI is at 72.311, which is neutral but close to overbought territory. Moving averages are converging, showing no clear trend. The stock is trading near resistance levels (R1: 476.578), which could limit upside potential in the short term.
Barington Companies Management recently acquired 13,000 shares, indicating confidence in the stock.
Chemed's Board authorized a $300 million stock buyback program, which could support the stock price.
Quarterly dividend of $0.60 per share reflects stable cash flow and profitability.
Jefferies downgraded the stock to Hold from Buy, citing margin headwinds and limited growth visibility.
Hedge funds are selling, with a 158.47% increase in selling activity over the last quarter.
Financial performance in Q3 2025 showed declining net income (-15.23% YoY), EPS (-10.80% YoY), and gross margin (-9.80% YoY).
In Q3 2025, revenue increased by 3.09% YoY to $624.9 million, but net income dropped by 15.23% YoY to $64.24 million. EPS also declined by 10.80% YoY to $4.46, and gross margin fell by 9.80% YoY to 28.91%. These trends indicate weakening profitability despite revenue growth.
Jefferies downgraded Chemed to Hold from Buy with a reduced price target of $475 (previously $550), citing margin headwinds and limited growth visibility. Analysts expect the stock to trade sideways absent a strategic announcement.
