-- Chemed's (CHE) VITAS unit continues to build its momentum, driving a Q1 beat and a "rare" post-Q1 guidance raise for the company, RBC Capital Markets said in a Monday note.
"We remain encouraged by VITAS momentum in Florida's new markets, where the company has added meaningful Medicare Cap cushion, significantly limiting cap limitation risk this year," the report said.
Chemed operates VITAS, a provider of end-of-life care, and Roto-Rooter, a plumbing and drain cleaning services provider.
The report said a higher mix of paid leads at Roto-Rooter continues to pressure its margins.
"We remain cautious on Roto-Rooter, where structural marketing
cost headwinds persist and macro risk looms," the note said.
RBC raised its price target to $436 from $422 while keeping its sector perform rating.
Price: $420.03, Change: $-1.09, Percent Change: -0.26%