Redcare Pharmacy Faces Mounting Pressure in Over-the-Counter Segment

The competitive landscape for Germany’s online pharmacy market is intensifying. Rossmann has announced its intention to launch an online pharmacy business in 2026, following the move by rival dm. dm began selling approximately 2,500 over-the-counter (OTC) products via its “dm-med” platform in December 2025, operating from a logistics center in the Czech Republic. Rossmann’s CEO, Raoul Roßmann, has labeled the venture a “central project for 2026,” with plans to leverage the company’s existing app, which boasts some 11 million active users.

Revised Forecasts Signal Headwinds

Redcare Pharmacy’s preliminary 2025 results showed robust headline growth: revenue advanced by 24 percent to €2.9 billion, adjusted EBITDA surged 72 percent, and prescription (Rx) revenue crossed the €1 billion threshold for the first time. However, the company’s forward guidance disappointed investors.

Management has significantly tempered its growth expectations for the OTC segment, now projecting an increase of just 8 to 10 percent, down from a previous target of 16 percent. Furthermore, the medium-term margin goal for this division has been revised downward from 8 percent to 5 percent. CEO Olaf Heinrich cited the sluggish rollout of the e-prescription system and escalating competitive pressures in the non-prescription market as reasons for the adjustment.

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

Prescription Business Provides a Defensive Moat

In the near term, Redcare’s core prescription medication operation remains insulated from this new competition. Rossmann has confirmed it will not offer prescription drugs. Redcare maintains a strong position in this regulated arena, holding a CardLink license valid until January 2027 and featuring integration with the GesundheitsID. The company secured €503 million in Rx revenue in Germany during 2025, capturing a 67 percent market share. For 2026, the firm is targeting Rx revenues exceeding €670 million.

Shares Hit Lows Amid Divergent Analyst Views

The company’s stock touched a new 52-week low of €33.54 on Friday, representing a decline of roughly 50 percent since the start of the year. Despite this severe downturn, analyst sentiment remains predominantly positive. Seven out of nine covering analysts currently rate the shares a “buy,” with two advising investors to hold. The average 12-month price target stands at €94.94, with estimates ranging widely from €54 to €150. This substantial gap between the current price and analyst targets underscores the significant uncertainty currently priced into the equity.

Investors will be watching two key upcoming events. The Annual General Meeting on April 15 will include a vote on the appointment of a new Chief Financial Officer, Hendrik Krampe, formerly Finance Director for Amazon’s European Marketplace business. Subsequently, the release of Q1 2026 figures on May 6 will provide critical insight into whether the prescription business momentum is sustaining and if the OTC segment is showing signs of stabilization despite the heightened competitive environment.