Redcare Pharmacy Sits in Limbo as Short Sellers Battle the Bulls and an Index Axe Hovers

Redcare Pharmacy's first-half 2026 revenue rose to €849.5M but stock fell 34% amid short interest surge, margin compression, and potential MDAX demotion. Analysts divided.

The numbers tell two stories at Redcare Pharmacy. First-half 2026 revenue climbed to €849.5 million, up from €717.3 million a year earlier, and the net loss narrowed slightly to €10.5 million. Yet the stock has shed 34% since January alone and trades at €44.60, more than 60% below its 52-week peak of €117.40. That yawning gap between operational momentum and market sentiment has left the online pharmacy in a precarious deadlock.

Nowhere is the scepticism more visible than in the short book. Short interest has ballooned to 9.88% of the free float, far above the 12-month average of 6.32%. Six disclosed positions account for 8.66% of capital, led by D.E. Shaw & Co. with 3.46%. JPMorgan Asset Management (UK), Two Sigma Investments, AHL Partners, Jupiter Asset Management and PDT Partners round out the list. These bears are betting that the margin compression evident in the first quarter is no temporary blip. The gross margin slid from 23.3% to 21.0% as competition in over-the-counter products intensified, the share of lower-margin prescription drugs rose, and a new Rx bonus programme launched last September dragged on profitability.

Against that backdrop, Deutsche Bank continues to swim against the tide. Analyst Jan Koch reaffirmed a “Buy” rating with a €99 price target after the management team struck an upbeat tone at the dbAccess European Champions Conference in Frankfurt. He pointed to a solid start to the second quarter and reiterated confidence in the full-year guidance. The broker sees the current valuation as ignoring a genuine operational recovery. But the market remains unimpressed — the stock’s 14-day relative strength index sits at exactly 50, a textbook neutral reading that reflects the lack of conviction among buyers.

A fresh source of pressure may come from the index committee. JPMorgan’s Pankaj Gupta has flagged Redcare as a prime candidate for demotion from the MDAX when the composition is reviewed on 3 June 2026, with Suss Microtec tipped as a possible replacement. Any change would take effect on 22 June. An exit would trigger forced selling by exchange-traded funds and passive institutional mandates, adding to the downward drift. The company’s current market capitalisation of roughly €869 million leaves little room for error.

The investment case is further muddied by the wide dispersion in analyst targets. Jefferies retains a “Buy” rating with a €150 price target, betting on the secular growth of e-prescriptions and the expanding customer base. At the other extreme, UBS warns of a deceleration in the core OTC business and slaps a €74 target on the stock. The management itself has lowered its medium-term margin ambition from above 8% to more than 5%, and the current year is being treated as an investment phase — a new logistics centre in Pilsen and automation work at Sevenum are absorbing cash. Liquidity dropped to €135.0 million at the end of March after the company repurchased €64.5 million of convertible bonds during the quarter.

The half-year report due on 29 July 2026 will be the next major catalyst. It will show whether the second-quarter momentum that Deutsche Bank has flagged is enough to lift the adjusted EBITDA margin from the first-quarter level of 1.7% towards the full-year floor of 2.5%. Until then, Redcare Pharmacy remains caught between a bullish analyst minority and a growing army of short sellers, with the MDAX axe swinging in the background.