Chemed Q3 Beat, Guidance Raise Reflect Vitas Strength, BofA Says

MT Newswires Live10-28

Chemed (CHE) beat Q3 expectations and raised guidance, driven by strong Vitas performance that offset Roto-Rooter weakness, BofA Securities said in a note Wednesday.

The company reported Q3 earnings before interest, taxes, depreciation and amortization 2% above expectations and earnings per share 5% above expectations, prompting a slight increase to its full-year guidance, the analysts said.

Chemed's guidance increase also implies a $0.40 per-share or about $7 million pretax, increase at the midpoint, the analysts said. This exceeds the $3 million Q3 EBITDA beat versus consensus, as Chemed expects continued strength at Vitas in Q4. The Roto-Rooter franchise acquisition is expected to contribute less than $1 million in EBITDA.

"Overall, Vitas continues to outperform, more than offsetting weaker Roto," the analysts added.

BofA raised its price target on Chemed to $555 from $550 while keeping its neutral rating.

Price: 553.91, Change: +44.82, Percent Change: +8.80

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