What Happened?
Shares of healthcare services company Chemed Corporation (NYSE: CHE) jumped 1.2% in the afternoon session after the company received a stock rating upgrade from financial services firm Jefferies.
Jefferies analyst Brian Tanquilut upgraded Chemed from a "Hold" to a "Buy" rating, signaling increased confidence in the company's future performance. Alongside the improved rating, the firm also raised its price target on the stock significantly, moving it to $550 from the previous target of $490. This new price target suggests a potential upside from the stock's recent closing price. Such upgrades from analysts can often lead to increased investor interest and a positive short-term impact on a company's share price.
After the initial pop the shares cooled down to $465.26, up 1.6% from previous close.
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What Is The Market Telling Us
Chemed’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 14.7% on the news that the company provided a negative update on its full-year 2025 guidance, citing issues with its VITAS hospice business.
The company announced that it now anticipates a significant Medicare Cap revenue limitation for its VITAS subsidiary in Florida. Specifically, Chemed projects a shortfall of $18 million to $25 million for the 2025 fiscal year ending in September, a reversal from previous expectations of having a cushion. The company pointed to weaker-than-expected Medicare admissions in April and May as the primary cause. Adding to concerns, Chemed also noted unexpected weakness in the residential demand for its Roto-Rooter plumbing services during the second quarter.
Chemed is down 11.9% since the beginning of the year, and at $465.26 per share, it is trading 24.9% below its 52-week high of $619.21 from April 2025. Investors who bought $1,000 worth of Chemed’s shares 5 years ago would now be looking at an investment worth $888.80.
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