Deutsche Bank Upgrades DocMorris to 'Buy,' Doubles Price Target to 11.50 Francs

Deutsche Bank has upgraded Swiss online pharmacy DocMorris AG to "Buy" from "Hold," citing an increasingly attractive risk/reward profile as concerns over the company's funding needs subside. The bank more than doubled its price target on the stock to 11.50 Swiss francs from a previous 5.50 francs.

Shifting Investment Focus

In a note to clients, Deutsche Bank analyst Jan Koch outlined four key factors driving the upgrade: likely upside to 2026 guidance, reduced funding requirements, a more favorable regulatory backdrop, and the underappreciated value of its TeleClinic digital health service.

The bank believes the market narrative is changing for DocMorris. "Following a period dominated by concerns over funding needs and execution risk, we believe the investment debate is shifting towards earnings growth, cash flow improvement and the monetisation of DocMorris’ digital health ecosystem," Koch stated.

Backed by Q1 Momentum

The upgraded rating is supported by the company's recent performance. DocMorris reported strong first-quarter results that exceeded expectations and pointed to accelerating business momentum, particularly in its core German prescription drug market.

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Key Q1 performance metrics include:

• Revenue Growth: Increased 10.7% year-over-year in local currency to 318.1 million francs.
• German Prescription Sales: Surged 30.4% year-over-year, boosted by bonus incentives on co-payments.
• Adjusted EBITDA: Improved by nearly 10 million francs year-over-year to negative 6.3 million francs.
• Digital Services Growth: Revenue from services including TeleClinic and its marketplace grew 63.1%.

Outlook and Market Context

DocMorris is on track to reach adjusted EBITDA break-even by the fourth quarter of 2026 at the latest, according to its own statements. The company is targeting free cash flow break-even in 2027.

Shares in DocMorris last closed at 8.58 francs. The new price target from Deutsche Bank suggests significant potential upside from the current trading level, reflecting a renewed confidence in the company's growth trajectory and path to profitability.