Redcare Pharmacy Faces a Defining Financial Moment

Redcare Pharmacy NL0012044747

Investors in Redcare Pharmacy are bracing for a pivotal test of the company's financial resilience. On January 21, 2026, the company is scheduled to make a final €64.5 million payment, concluding a major debt restructuring initiative. This comes as the company's shares trade around €63, hovering perilously close to their 52-week low of €60.35. Despite the release of robust preliminary revenue figures for 2025, market sentiment remains subdued, raising a critical question: is growth alone sufficient to satisfy the market?

The path forward for Redcare Pharmacy is a subject of sharp debate among market experts. Analyst opinions reveal deep divisions regarding the stock's valuation and prospects. On January 9, Deutsche Bank Research staked out the most bullish position, issuing a "Buy" rating with a price target of €200. In contrast, Barclays reduced its target from €130 to €110 on January 16. Jefferies reiterated its buy recommendation with a €150 target, naming Redcare among its favored European mid-cap stocks for 2026. UBS maintains a far more cautious "Neutral" stance with a €74 target.

The average price target stands at approximately €131.56, more than double the current trading price. However, the enormous gap between the highest and lowest estimates, spanning €74 to €200, underscores profound uncertainty about the company's journey to sustained profitability.

A Strategic Debt Reduction Nears Completion

The impending payment represents the final step in a systematic debt reduction plan executed throughout 2025. The process was triggered when bondholders of the 2021/2028 convertible bond exercised their put options, with the redemption announced on December 19, 2025.

Key milestones in this financial overhaul include:
* April 2025: Repurchase of €157.9 million of the original convertible bond.
* April 2025: Issuance of new convertible bonds totaling €300 million (maturing 2032).
* January 21, 2026: Final repayment of €64.5 million.
* Remaining balance: Only €2.6 million of the old bond remains outstanding.

The company appears well-positioned to handle this obligation. As of September 30, 2025, Redcare held liquid funds of €265.6 million, a significant increase from the €177.6 million reported at the end of 2024.

Strong Top-Line Growth Fails to Impress Market

Preliminary results for 2025, published on January 7, 2026, confirm the company's continued revenue expansion. Full-year sales grew by 24% to €2.9 billion, with fourth-quarter revenue advancing 18% to €794 million. A standout performer was the German prescription business, where sales nearly doubled to €503 million. The base of active customers expanded by 1.4 million to reach 13.9 million.

Nevertheless, investors continue to punish the stock. The message from the market is clear: revenue growth alone is no longer enough. The company is still expected to report a loss per share for 2025, with market participants hoping for a turnaround to profitability in 2026.

All Eyes on the Upcoming Annual Report

The next crucial event is the publication of the full 2025 annual report on March 4, 2026, which will include the outlook for the current year. This report will provide the first detailed look at the impact of the December 2025 launch of 'dm-med' on the over-the-counter (OTC) business segment. Key focuses will be whether Redcare managed to maintain the adjusted EBITDA margin of 2.4% achieved in the third quarter of 2025 and the progress of its strategic shift toward the higher-margin prescription segment.