Berenberg upgrades DocMorris and Redcare on e-script boost

DocMorris AG

05/01/2024 08:17

** Berenberg upgrades online drug retailers DocMorris
 DOCM.S  and Redcare Pharmacy  RDC.DE  to "buy" from "hold" on
improving momentum of German online prescriptions (e-scripts)
    ** While it is uncertain when online pharmacies will be able
to easily fulfil e-scripts, the broker sees a high probability
it will happen in Q1 of 2024
    ** It expects 100% annual growth in e-scripts revenue for
both companies from 2024
    ** Berenberg says Redcare's market share gains, margin
expansion and positive FCF from its predominantly
over-the-counter business means that risk is now skewed to the
upside, as potential e-script news could significantly boost the
stock
    ** Meanwhile, DocMorris will benefit "disproportionately"
from e-scripts, and its path to profitability will depend
largely on e-script revenue contribution, the broker says
    ** It expects DocMorris' German online pharmacy business to
return to positive year-on-year revenue growth of 9% in Q4,
after the firm cut FY sales forecast following a Q3 decline

 (Reporting by Mateusz Dobrzyniewski)
 ((Mateusz.dobrzyniewski@thomsonreuters.com))