Baader Helvea cuts Docmorris to 'reduce', awaits capital increase amid weaker guidance

** Baader Helvea cuts Swiss online pharmacy DocMorris DOCM to "reduce" from "add", as it expects a 125% stock dilution as a result of the planned capital increase, adding that the recent 2025 guidance remains below expectations

** The broker says for the company to reach a capital amount of 200 million Swiss francs ($245 million) in the planned capital inrease, it expects around 15 million new shares, resulting in a 125% dilution

** "Needless to say that a further share price decline until 8-May-25 would result in less favorable capital increase conditions for DocMorris," Baader says

** Last week, the company said it expected 2025 adjusted EBITDA of minus 35 million to minus 55 million francs, as it decided to invest more in marketing of CardLink, a digital prescription service in Germany

** Baader expects that DocMorris will be profitable on an adj. EBITDA basis from 2027 on, compared to a previous expectation of 2026

** According to a Reuters poll, 1 analyst rates the stock as "strong buy," 2 as "buy," 5 as "hold," and 2 as "sell"

($1 = 0.8177 Swiss francs)