RD Saúde (RADL3): JP Morgan Predicts 44% Surge as ‘Favorable Winds’ Blow in 2025
- Why Is JP Morgan Bullish on RD Saúde (RADL3)?
- Operational Wins and Financial Resilience
- The GLP-1 Drug Boom: A Tailwind for RADL3
- Q3 2025 Outlook: What to Watch
- Long-Term Growth Drivers
- Risks? Supermarkets and Online Competition
- FAQs: Your RD Saúde (RADL3) Cheat Sheet
JP Morgan has upgraded its price target for RD Saúde (RADL3) to R$27 by 2026, citing a 44% upside potential. The bank highlights the company’s strong execution, exposure to high-margin GLP-1 drugs, and resilience in Brazil’s retail sector. With shares already up 30% in three months, analysts see further room for growth driven by operational improvements and market consolidation. Here’s why RADL3 could be a standout pick for 2025.
Why Is JP Morgan Bullish on RD Saúde (RADL3)?
JP Morgan’s analysts, including Joseph Giordano and team, raised RADL3’s price target from R$24 to R$27 this week, projecting a 44.1% gain from its October 14 closing price. The upgrade reflects confidence in RD Saúde’s turnaround story, fueled by strategic restructuring and a rebound in profitability. The stock surged 5.55% to R$19.78 on the news, outperforming the Ibovespa.
Operational Wins and Financial Resilience
RD Saúde’s Q2 2025 results beat expectations, with adjusted net profit up 13% year-over-year to R$402.7 million. EBITDA ROSE 7.4% to R$885 million, driven by cost controls and fewer theft-related losses. Analysts note that margins are stabilizing, with gross pressure easing—a rare bright spot in Brazil’s struggling retail sector. "The market is shifting focus to RD’s fundamentals," the report states.
The GLP-1 Drug Boom: A Tailwind for RADL3
Monjauro, a newly launched weight-loss drug, is expected to boost RD Saúde’s revenue. JP Morgan estimates GLP-1 drugs will contribute over 5% of sales by 2026, despite thinner 10% margins. The bank downplays risks from future generics, arguing RD’s premium clientele (concentrated in Brazil’s wealthier Southeast) will sustain demand. "This isn’t a fad—it’s a structural advantage," analysts wrote.
Q3 2025 Outlook: What to Watch
JP Morgan forecasts accelerating revenue growth in Q3, led by GLP-1 sales and recovery in cosmetics. Gross margins may dip 40 basis points due to pricing regulations, but EBITDA margins are expected to hold steady. The bank projects Q3 net income of R$352 million (R$0.21 EPS). Results drop November 4 post-market.
Long-Term Growth Drivers
With a 16.5% market share and plans to expand its 3,300-store network by 10% annually, RD Saúde aims to outpace Brazil’s pharmacy sector (which typically doubles every 7–8 years). Digital initiatives and superior store productivity (30% above peers) could further widen its lead. "RD is the best play on Brazil’s aging population and pharmacy consolidation," the report concludes.
Risks? Supermarkets and Online Competition
Potential legislation allowing supermarkets and e-commerce platforms to sell medicines poses a threat, but JP Morgan sees minimal long-term impact. RD’s partnerships with global pharma players and its focus on high-income customers should insulate it.
FAQs: Your RD Saúde (RADL3) Cheat Sheet
What’s JP Morgan’s new price target for RADL3?
R$27 by end-2026, implying 44% upside from October 14’s close.
How did RD Saúde perform in Q2 2025?
Net profit rose 13% to R$402.7 million; EBITDA grew 7.4% to R$885 million.
Why are GLP-1 drugs important for RD?
They attract high-income customers and partner deals with global pharma firms.
