Chemed Corporation (CHE) is surging about 10% as investors react to a stronger-than-expected first-quarter 2026 report and a more upbeat full-year profit outlook. The move follows Chemed’s Q1 print of $657.5 million in revenue and adjusted EPS of $5.65, both ahead of consensus estimates, alongside commentary that the company is evaluating strategic options that could include divesting its Roto-Rooter business.

For Q1 2026, Chemed reported consolidated revenue of $657.5 million (+1.6% year over year) and adjusted EPS of $5.65 versus expectations around $5.34, helping reset near-term sentiment after prior concerns about margin pressure. Investors also focused on cash generation and capital returns, including Q1 share repurchases of 500,000 shares for $197.7 million at an average cost of $395.36, with remaining authorization still available.

Chemed lifted its full-year 2026 adjusted diluted EPS guidance to $24.00–$24.75, citing stronger VITAS performance and the impact of Q1 buybacks. On the strategic front, management discussions around potential divestiture options for Roto-Rooter added an additional catalyst, as investors weigh whether a portfolio move could unlock value or sharpen the company’s focus around the faster-growing hospice platform.

Attention now turns to whether the guidance increase holds through the year and how segment trends develop, particularly as Roto-Rooter faced weather-related disruption and margin pressure in Q1. Markets will also look for clearer signals on whether a Roto-Rooter transaction becomes formal (process, timing, or structure) and whether Chemed continues aggressive repurchases following the quarter’s sizable buyback pace.