RD (RADL3.SA): Staying Cautious

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11 Aug 2026 05:00:00 ET │ 13 pages

RD (RADL3.SA)

Staying Cautious

CITI'S TAKE

We update our RADL post 2Q26 results, keeping our earnings estimates

largely unchanged and TP at R$18.0/Sh. While the combo of resilient

topline dynamics (with accelerating HPC sales) and strong cash flow

dynamics (aided by the ending of ICMS-ST tax regime) where notable Q2

positives, we argue that increasingly tough sales comps and stubbornly

high selling expenses continue to represent a margin-risk into 2H26.

Moreover, uncertainty around GLP-1 economics and demand elasticity,

combined with different moving pieces around the state of digital

competition/regulation (Folha De S.Paulo, 8 Aug), may continue to fuel

volatility from time to time. Plus, with stock now trading at 18.5x P/E 2027e

after the recent bounce, we continue to find valuation somewhat

demanding for a deceleration setup and big-picture digital/competition

concerns. Stay cautious.

Model update — We are fine-tuning our RADL model post 2Q26 results, keeping our

2026/2027 earnings estimates largely unchanged and TP at R$18.0/Sh. Even giving

the benefit of the doubt on consistent ex-GLP-1 sales growth in coming quarters

(~12%), retail topline should continue to decelerate on the back of challenging GLP1 comps, which combined with stubbornly high selling costs per store, may pressure

EBITDA margins in coming quarters. In fact, a brief consensus recap for RADL over

the past 4 years underscores that despite topline broadly tracking beginning-ofyear expectations, EBITDA has consistently come in well below, a pattern that, in our

view, continues to pose downside-risk to VA consensus estimates of ~50bps

EBITDA margin expansion embedded for 2026–2028e.

n

Sell

Price (10 Aug 26 18:00)

R$19.38

Target price

R$18.00

Expected share price return

-7.1%

Expected dividend yield

0.0%

Expected total return

-7.1%

Market Cap

R$33,961M

US$6,683M

Price Performance

(RIC: RADL3.SA, BB: RADL3 BZ)

GLP-1 moving pieces — While the debate around GLP-1 consumption elasticity

continues to linger, we believe the data remains too nascent to draw firm

conclusions, also as: a) price cuts were largely concentrated in semaglutide (-22%

…