Oppenheimer still believes Chemed can unlock Roto-Rooter's value operationally. However, it makes sense to looking at the value of the two companies separately given their lack of synergies and changes to the business, the analyst tells investors in a research note. Oppenheimer applied a 12-18 times multiple on the Roto-Rooter business, equating to $2.3B to $3.5B. Potential value can be unlocked by splitting up the companies, contends the firm. Its analysis puts the total value of Chemed at a $5.6B to $7.8B enterprise value, which translates to $426-$588 per share, or upside potential of 16%-59% from current levels. As such, the analyst recommends being long-term buyer of the stock. Oppenheimer has an Outperform rating on Chemed with a $500 price target. The stock in morning trading is up 1% to $378.27.
