SCI Service Corporation International

Service Corporation International has recently faced challenges with weaker funeral service volumes, pressured free cash flow margins, and declining returns on capital. This trend raises concerns about the company's ability to fund growth, buybacks, and dividends, despite securing a new senior unsecured credit agreement. Investors are encouraged to consider these factors, alongside various fair value estimates, to form a comprehensive view of SCI's future prospects.

Coho Partners Ltd. reduced its stake in Service Corporation International ($SCI) by 42.8% in the third quarter, selling 252,906 shares and now owning 338,402 shares. This makes Service Corporation International its 13th largest holding, representing 3.6% of Coho Partners Ltd.'s portfolio. Other institutional investors have also adjusted their positions in the company, while analysts generally maintain a "Moderate Buy" rating with an average target price of $92.00.

Service Corporation International (SCI) is facing challenges with two years of disappointing funeral service volumes, weak free cash flow, and declining returns on capital, which is pressuring its growth and ability to support shareholder payouts. Despite these issues, the share price has remained stable, trading at a discount to analyst and intrinsic estimates. The article explores whether SCI is undervalued or if the market anticipates future growth, concluding with a "Fair Value of $95.40 (UNDERVALUED)" based on a strong narrative but also highlighting risks and less generous earnings-based valuations.

This article identifies three consumer discretionary stocks—Service Corp. International (SCI), Mister Car Wash (MCW), and Universal Technical Institute (UTI)—that exhibit warning signs for investors despite the recent growth in the broader discretionary sector. The author advises caution due to issues like weak demand, poor free cash flow, high leverage, and shrinking returns on capital, suggesting these companies may underperform. It also promotes a curated list of "High Quality" stocks that have historically outperformed the market.

Shares of Service International (NYSE:SCI), a funeral services company, rose 1.9% after an analyst at UBS reiterated a Buy rating and a $95.00 price target. This positive outlook is driven by anticipated long-term growth from the aging baby boomer population and strong Q3 2025 earnings that surpassed Wall Street expectations. The company also increased its quarterly cash dividend, further benefiting shareholders.

Elisabeth G. Nash, Senior Vice President of Operations Services at SERVICE CORP INTERNATIONAL (NYSE:SCI), sold 42,400 shares of common stock for over $3.2 million, while also exercising options to acquire an equivalent number of shares at a significant discount. These transactions occurred as SCI trades near its 52-week low, with analysts suggesting potential upside. The company has also recently exceeded Q3 2025 earnings expectations, secured a $2.5 billion credit agreement, and raised its quarterly dividend.