Positive Outlook for Chemed’s Roto-Rooter Segment Justifies Buy Rating Amid Rising Demand and Revenue Growth

Analyst Joanna Gajuk of Bank of America Securities maintained a Buy rating on Chemed (CHE – Research Report), retaining the price target of $708.00.

Joanna Gajuk has given her Buy rating due to a combination of factors that indicate a positive outlook for Chemed’s Roto-Rooter segment. The significant increase in Google searches for plumbing services in the first quarter of 2025, which rose by 16% quarter-over-quarter and 7% year-over-year, suggests a robust demand that correlates with an expected 3% year-over-year revenue growth for Roto-Rooter. This growth is anticipated to surpass both consensus estimates and previous forecasts.
Additionally, spending data from credit and debit cards shows a 9% year-over-year increase in expenditures on Roto-Rooter services, further supporting the positive revenue outlook. The ability of Roto-Rooter to pass on higher prices to consumers, coupled with the essential nature of its services, provides a solid foundation for future growth. Furthermore, the potential for capital deployment and the strong performance of Chemed’s Vitas segment contribute to the overall positive assessment, justifying the Buy rating.