CHE Should I Buy
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Chemed Corp (CHE) is not a strong buy at the moment for a beginner investor with a long-term strategy. While there is potential upside in the stock, the lack of positive short-term signals, weak financial performance, and mixed analyst sentiment suggest holding off on making a purchase right now.
The MACD is positive but contracting, showing weakening momentum. RSI is neutral at 49.398, and moving averages are converging, indicating no clear trend. The stock is trading near its pivot level of 384.997, with resistance at 395.023 and support at 374.97.
Analysts see potential long-term value in the stock, with price targets ranging from $400 to $500, suggesting upside potential of 16%-59%. Additionally, there is a possibility of unlocking value through a breakup of the company's segments.
Hedge funds are selling heavily, with a 158.47% increase in selling activity last quarter. Financial performance in Q4 2025 was weak, with declines in revenue, net income, EPS, and gross margin. Analysts have downgraded the stock due to persistent margin headwinds in the Roto-Rooter segment, and there is limited visibility into improvement.
In Q4 2025, revenue dropped by -0.10% YoY to $639.3M. Net income fell by -15.02% YoY to $76.75M, EPS declined by -8.96% YoY to $5.49, and gross margin dropped by -4.22% to 32.67%. These metrics indicate a challenging financial environment for the company.
Analysts have mixed views. Oppenheimer maintains an Outperform rating with a $500 price target, citing long-term value potential. However, RBC Capital, BofA, and Jefferies have downgraded the stock due to margin headwinds and disappointing financial results. Price targets range from $400 to $500, reflecting cautious optimism but significant near-term challenges.
