Chemed Receives a Rating Update from a Top Analyst

By Austin Angelo

Oppenheimer analyst Michael Wiederhorn maintained a Buy rating on Chemed (NYSE: CHE) today and set a price target of $275. The company’s shares closed yesterday at $253.73.

Wiederhorn observed:

“CHE reported 4Q:17 adj. EPS of $2.32 (GAAP: $3.25) vs. OPCO/Street of $2.28/ $2.27E. Adj. results exclude the normal items (OIG/stock options/stock-comp/etc.) along with a $0.49 tax reform benefit and a $0.20 litigation benefit. Roto-Rooter drove the beat (+$1.3M vs. OPCO), mostly offset by underperformance at Vitas (-$1.2M) due to a $2M+ cap charge. Nevertheless, we would not be overly concerned given the typical volatility inherent in the early cap year calculation. Following the quarter, Chemed issued impressive FY2018 EPS guidance of $10.60-$10.85, well ahead of OPCO’s $8.76, due to tax reform (~$1.80-ish) and stronger operational expectations. As a result, we are raising our FY2018/2019 EPS estimates to $10.72/$11.37 from $8.76/$9.32 and our price target to $275 from $270.”

According to TipRanks.com, Wiederhorn is a top 100 analyst with an average return of 15.6% and a 70.3% success rate. Wiederhorn covers the Services sector, focusing on stocks such as Cross Country Healthcare, Addus Homecare Corp, and Envision Healthcare.

Chemed has an analyst consensus of Moderate Buy, with a price target consensus of $275.

Based on Chemed’s latest earnings report for the quarter ending December 31, the company posted quarterly revenue of $428 million and quarterly net profit of $54.55 million. In comparison, last year the company earned revenue of $403 million and had a net profit of $32.19 million.

Based on the recent corporate insider activity of 57 insiders, corporate insider sentiment is negative on the stock.

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Chemed Corp. engages in the provision of healthcare and maintenance services. It operates through the VITAS and Roto-Rooter segments.