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Investing.com - UBS upgraded Raia Drogasil SA (RADL3:BZ) from Neutral to Buy and raised its price target to R$25.00 from R$20.00 on Monday.
The upgrade comes as UBS expects solid acceleration in top-line growth for the Brazilian pharmacy chain, supported by increasing sales of GLP-1 medications following the May launch of Mounjaro in Brazil.
UBS anticipates high single-digit mature same store sales growth in the near term, driven by GLP-1 sales acceleration and potential increases in health and personal care product sales, factors the firm believes are not yet reflected in the stock price.
The investment bank raised its 2025-2027 earnings estimates by 4-5% to R$1.3 billion, R$1.7 billion, and R$2.2 billion respectively, with projections running 5-10% above consensus estimates for 2025-2026.
UBS maintains a constructive long-term outlook for Raia Drogasil, citing consistent execution, store expansion opportunities, and favorable industry trends that support a five-year expected earnings per share compound annual growth rate of 19%.
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