Redcare Pharmacy Shares Under Pressure Following Index Removal

Redcare Pharmacy shares hit new lows after cutting its EBITDA margin target and being removed from a key index, despite strong revenue growth.

The equity of online pharmacy group Redcare Pharmacy faces renewed selling pressure this week. Effective Monday, the company's stock was removed from the STOXX Theme Indices, an administrative decision that compounds existing challenges for the beleaguered shares.

Profitability Forecast Revision Drives Downturn

The primary catalyst for the stock's persistent decline is a recently revised business outlook. While management projects solid revenue growth of 13 to 15 percent for the 2026 fiscal year, the market reacted negatively to a significant adjustment in profitability targets. The medium-term goal for the EBITDA margin has been reduced from a previous forecast of over 8 percent to now just over 5 percent. For the current year, the company is calculating only an adjusted margin of at least 2.5 percent.

This revision overshadowed otherwise robust operational results for 2025. Group revenue climbed by over 24 percent to 2.9 billion euros. The prescription medication business exceeded one billion euros group-wide for the first time, with related revenues in Germany nearly doubling to 503 million euros.

Technical Indicators Signal Extreme Oversold Conditions

From a charting perspective, the equity is emitting extreme signals. The Relative Strength Index (RSI) recently fell to a rare reading of 8 at times, indicating a massively oversold situation. Although such levels often precede technical rebounds, the overarching downward trend remains intact. The shares established a new 52-week low at 33.54 euros on Friday and have lost approximately half their value since the start of the year.

The exclusion from the index compels institutional investors and index-tracking funds to adjust their holdings. This is creating additional short-term selling pressure on the already weakened stock.

Analyst Sentiment Remains Divided

Despite the drastic price decline, several financial institutions maintain their positive assessment. In March, firms including Deutsche Bank and Jefferies reaffirmed their buy recommendations. Analysts at Jefferies contextualized the recent disappointment, noting that the new 2026 EBITDA forecast of approximately 84 million euros came in about 19 percent below the prior market consensus.

In contrast, Swiss banking giant UBS maintains a neutral stance, citing a persistent slowdown in growth for the over-the-counter medication segment. However, UBS's price target of 74 euros remains significantly above the current trading level.