Redcare Pharmacy Faces Mounting Pressure as Drugstore Giants Enter Online Arena

Redcare Pharmacy NL0012044747

Germany's online pharmacy sector is bracing for intensified competition. In a strategic move, Rossmann has confirmed plans to launch its own digital pharmacy service, following rival dm's entry just weeks prior. Significantly, Rossmann will base its operations in the Netherlands—the home market of sector leader Redcare Pharmacy. This dual offensive has triggered a sharp sell-off in Redcare's shares, sending them to a multi-year low.

The confirmation from Rossmann CEO Raoul Roßmann signals a serious new threat. The drugstore chain reports it is already "deeply involved" in the venture, making its launch a near certainty. The decision to operate from the Netherlands places it in direct territorial competition with Redcare on its home turf.

Within a short span, Redcare now confronts challenges from two established retail chains, each bringing substantial advantages to the fight:
* A vast, pre-existing customer base numbering in the millions
* Robust, operational logistics and distribution networks
* Considerable brand recognition and trust
* Significant financial resources and muscle

The timing of this competitive surge is particularly inopportune for Redcare. The company recently made a €64.5 million payment for bond refinancing. This financial outlay coincides with disappointing quarterly results; fourth-quarter 2025 revenues missed expectations by approximately 3%. A notable area of concern is the underperformance in the high-margin Non-Rx segment, which covers over-the-counter products.

Share Price and Market Sentiment Under Strain

Redcare's stock has declined by roughly half over the past twelve months. On Wednesday, the share price touched €55.80, marking its lowest point since January 2023. The equity continues to trade only marginally above this level, testing a critical technical support zone.

Sector peer DocMorris experienced an even steeper single-day decline, losing over 10%. This heightened weakness is attributed to additional liquidity concerns. By comparison, Redcare maintains a more solid financial cushion, with cash reserves of €265.6 million as of September 2025.

Market sentiment remains bearish, as evidenced by a substantial short interest of nearly 14% of the company's outstanding shares. This indicates that a cohort of investors continues to bet on further price depreciation.

Divergent Views from Analysts

Expert opinions on the stock's outlook vary dramatically, reflecting deep uncertainty over Redcare's ability to defend its market position against well-funded competitors. Berenberg maintains a buy recommendation, while UBS has adopted a neutral stance with a price target of €74. In stark contrast, Deutsche Bank's analysis suggests a potential valuation of €214 per share—more than triple the current trading level.

All eyes are now on the company's full-year results, scheduled for release on March 4, 2026. Investors will scrutinize the margin trajectory within the Non-Rx business and the profitability of the e-prescription segment. Until then, the technical outlook for the shares remains precarious.