RD (RADL3.SA): 2Q26 Preview: Navigating the Decline; Stay Cautious

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RD (RADL3.SA): 2Q26 Preview: Navigating the Decline; Stay Cautious

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12 Jul 2026 17:00:03 ET │ 15 pages

RD (RADL3.SA)

2Q26 Preview: Navigating the Decel; Stay Cautious

CITI'S TAKE

We update our RADL model ahead of 2Q26 results, which we expect to be

broadly in line with VA consensus, as topline deceleration and gross margin

downtick constrain operating leverage at the EBITDA level, a dynamic we Sell

see intensifying through 2H26. Since our Sell downgrade, a combination of Price (10 Jul 26 18:00) R$18.77

continued price cuts across the GLP-1 space (including for LLY's superior

Target price R$18.00tirzepatide[Neofeed, 12 June]), limited TAM expansion (figures 4-5), and

modest gross margin across similars’ newcomers reinforced our concerns Expected share price return -4.1%

around deteriorating marginal economics forward. While the Street appears Expected dividend yield 0.0%

to be already discounting a lower growth outlook, we continue to see

Expected total return -4.1%downside-risk in margins assumptions, which may continue to sustain a

negative cycle of earnings revisions (CitiE -7/9% vs. VA adjusted EPS for Market Cap R$32,892M

2027/28e). Plus, with the stock now trading at 17.6x P/E 2027e post-recent US$6,364M

bounce, we continue to find valuation somewhat demanding for a

deceleration setup and big-picture digital/competition concerns. Stay

cautious.

Price Performance

2Q26e Preview — We are fine-tuning our RADL model ahead of 2Q26 numbers (Aug

(RIC: RADL3.SA, BB: RADL3 BZ)4th post-mkt.), which we expect to be largely in line with VA consensus, as the

expected topline deceleration (MSSS of 10%; impacted by industry decel figures 2-

3, stagnated GLP-1 sales figures 4-5) and a gross margin downtick (-20bps y/y)

should limit operating leverage at the EBITDA level.