Redcare Pharmacy: E-Prescription Boom Can’t Lift the Stock Out of Its 35% YTD Rut

Redcare Pharmacy’s shares clawed back 2.0% on Friday to close at €43.96, but the weekly scoreboard still showed a 1.3% decline — a microcosm of a stock that keeps advancing operationally while retreating in the market. Since the start of 2026, the equity has shed roughly 35% of its value, and over twelve months the drop has widened to 62.6%. The March low of €31.00 triggered a 40% recovery, yet most of that ground was given back in May, which alone accounted for an 8.5% monthly loss.

The disconnect between business momentum and investor sentiment is stark. Deutsche Bank analyst Jan Koch reaffirmed his buy rating on 28 May, keeping a €99 price target — more than double the current share price. That endorsement has done little to stem the bleeding: the stock trades 28% below its 200-day moving average of €60.89. The only technical bright spot is the 50-day average of €43.17, which sits just a whisker beneath Friday’s close. Still, with the longer-term trend so far away, that narrow cushion offers cold comfort.

Revenue growth remains robust. In the first quarter, group sales climbed 18.4% year-on-year, powered by a 55% surge in German prescription (Rx) business as the electronic prescription rollout accelerated. The non-prescription (OTC) German segment also gathered pace, accelerating from 5% growth in the preceding quarter to 9% in Q1 and roughly 11% in April. Adjusted EBITDA came in at €14.4 million, translating into a margin of 1.7%.

Should investors sell immediately? Or is it worth buying Redcare Pharmacy?

That margin figure is precisely where the trouble lies. Gross margin contracted to 21.0% from 23.3% a year earlier, squeezed by fierce OTC competition, a rising Rx mix, and a prescription bonus introduced in September 2025. The market is waiting for evidence that booming Rx volumes can eventually lift profitability rather than drag it down further.

Management is holding its ground. For the full year 2026, Redcare Pharmacy targets revenue expansion of 13% to 15%, German Rx sales above €670 million, and an adjusted EBITDA margin of at least 2.5%. The company’s next big test will come with the half-year report scheduled for 29 July, when investors will look for signs that margin pressure is easing.

On the charts, the immediate downside floor sits near €42.02 — the intraday low hit on 28 May. A break below that level would put the spring sell-off back in play. On the upside, the first meaningful resistance is at €45.68, followed by the late-April closing zone around €48.40. With the relative strength index hovering at a neutral 50 and annualised 30-day volatility standing at 49%, the stock remains in a holding pattern, caught between strong prescription growth and a margin squeeze that the market hasn’t yet forgiven.

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Redcare Pharmacy Stock: New Analysis - 30 May

Fresh Redcare Pharmacy information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

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