Initiation of Coverage Brazilian Retailers: A Deep-Dive into Brazil’s Pharma Retail

Research evidence excerpt

Initiation of Coverage Brazilian Retailers: A Deep-Dive into Brazil’s Pharma Retail

Global Research

23 July 2026ab by Powered Lab Evidence UBS YES

Initiation of Coverage

Brazilian Retailers Equities

A Deep-Dive into Brazil’s Pharma Retail Latin America

Consumer, Cyclical

Vinicius Strano, CFA

Positive sector view: structural growth, depressed valuation, GLP-1 catalysts Analyst

We deep-dive into the Brazilian pharma retail outlook and initiate coverage on vinicius.strano@ubs.com

PGMN (Buy; R$5/sh PT — note) and PNVL (Buy; R$17/sh PT — note). While much of +55-11-2767 6688

the recent debate has focused on GLP-1 economics, we view pharma as a Lucca Biasi

structurally attractive R$236bn market, set to grow at an 11% 2025-30E CAGR, Analyst

supported by population aging and healthcare spending. The market remains lucca.biasi@ubs.com

fragmented, with independents/associations share at ~45%, while high interest +55-11-2767 6173

rates could accelerate consolidation and favor scaled players. We believe GLP-1 Isabella Lamas

concerns are largely priced in, with our estimates implying ~3x formal market Analyst

volume growth after Semaglutide patent expiration, offsetting ~50% expected price isabella.lamas@ubs.com

erosion by 2030. We expect pharmacies' gross margin to expand in 2H26-2027 as +55-11-2767 6836

GLP-1 supply improves, as we anticipate gross profit contribution and earnings to be

preserved despite lower avg. ticket (which we believe is not priced in; see our

note). Company discussions indicate high GLP-1 price elasticity, while at least half

of branded generic buyers are new to the category. That could drive sequential

Semaglutide growth and stronger July volumes — potential sector catalysts.

Valuations for RADL, PGMN and PNVL remain near lows at 2027E PE multiples of