By Peet Serfontein & Pritu Makan
Dis-Chem is one of the leading pharmaceutical and consumer wellness groups in South Africa. The company takes a 'Pharmacy First' approach with the main aim of serving the primary pharmaceutical needs of individuals. Other products on offer include personal and beauty products, health, nutrition and baby care products, as well as confectionery, dry grocery, household and other ancillary goods. The group utilises its wholesale business to service third parties and Dis-Chem retail pharmacies through its CJ distribution business.
Technically, the price is in a developing symmetrical triangle pattern, which makes the share an interesting candidate for a long position (see black converging trendlines on the main chart). The price appears to be progressing into wave five of the developing symmetrical triangle, suggesting that the consolidation phase is nearing completion. This stage often precedes a decisive breakout.
Furthermore, the price distribution chart for DCP supports a bullish case given that the current price of R32.60 is situated within one of the most heavily traded and high-frequency zones over the last five years (see insert on main chart).
The price is trading above its 200-week simple moving average (SMA), but below its 200-day SMA - the level of the 200-day is at R33.54. This is generally seen as a form of long-term bullish support.
Upside momentum, as indicated by the Moving Average Convergence Divergence (MACD) histogram, supports the trade idea.
| Share Information | |
|---|---|
| Share Code | DCP |
| Industry | Consumer Staples Distribution |
| Market Capital (ZAR) | 28.04 billion |
| One Year Total Return | -8.49% |
| Return Year-to-Date | -8.90% |
| Current Price (ZAR) | 32.60 |
| 52 Week High (ZAR) | 40.00 |
| 52 Week Low (ZAR) | 26.50 |
| Financial Year End | February |
| While the share has come under pressure year-to-date, technical indicators are pointing towards a potential near-term recovery in the share price. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (ZAR) | 1.37 | 1.53 | 1.82 | 2.14 |
| Growth (%) | 11.57 | 18.98 | 17.21 | |
| Dividend Per Share (ZAR) | 0.55 | 0.61 | 0.73 | 0.87 |
| Growth (%) | 11.11 | 18.85 | 20.28 | |
| Forward PE (times) | 21.27 | 17.87 | 15.25 | |
| Forward Dividend Yield (%) | 1.87 | 2.22 | 2.67 | |
| Attractive double-digit earnings growth is expected over the forecast horizon. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | GRT - Buy (Continue to hold) |
SBK - Buy (Continue to hold) |
RDF - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 13.22 | 233.57 | 4.69 |
| Current Price | 14.80 | 250.40 | 4.94 |
| Movement | +12.0% | +7.2% | +5.3% |
| Comment | The share is trading in one of the highest price bins of the price distribution analysis which remains of interest. Remains above its 200-day SMA. Upside momentum supports the trade. Our profit target remains at R16.00 with a trailing stop-loss at R14.00. | The price is holding above key support. Crossed and remains above its 200-day SMA. Upside momentum supports the trade. We maintain our profit target at R261.00 and with a trailing stop-loss at R240.00. | The price is in a developing triangle pattern. Remains above its 200-day SMA. Upside momentum supports the trade. Our profit target remains at R5.30 with a trailing stop-loss at R4.70. |
| Time to exit | 17 November 2025 | 19 January 2026 | 1 September 2025 |
| Share Name and Position | VAL - Buy (Continue to hold) |
BID - Buy (Continue to hold) |
TBS - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 850.00 | 458.43 | 304.50 |
| Current Price | 865.53 | 464.02 | 308.00 |
| Movement | +1.8% | +1.2% | +1.1% |
| Comment | The price is developing a rounding top pattern. Remains above its 200-day simple moving average. Fading upside momentum is a concern. Our profit target remains at R1 063.00 with a stop-loss at R758.00. | The combination of a sustained bounce off the lower one standard deviation band, ongoing support from the broader upward trend and signs of renewed buying interest remains of interest. Remains above its 200-day SMA. Fading downside momentum supports the trade. Our profit target remains at R528.00 with a stop-loss at R437.00. | The price movement is aligned with a rising Volume Price Trend (VPT), backed by sustained accumulation and buying interest. Remains above its 200-day simple moving average. Fading downside momentum supports the trade strategy. We maintain our profit target at R345.00 with a trailing stop-loss at R292.00. |
| Time to exit | 10 September 2025 | 30 August 2025 | 27 October 2025 |
| Share Name and Position | STXFIN - Buy (Continue to hold) |
COH - Buy (Approaching time exit) |
|---|---|---|
| Entry | 21.75 | 8.82 |
| Current Price | 21.98 | 8.31 |
| Movement | +1.1% | -5.8% |
| Comment | The price remains above major support. Remains just above its 200-day SMA. Upside momentum supports the trade. We maintain our profit target at R25.00 with a stop-loss at R20.75. | The price is at a key distribution level. Remains below its 200-day SMA, marking this as a counter-trend setup. Muted upside momentum supports the trade. We maintain our profit target at R10.50 with a stop-loss at R8.20. |
| Time to exit | 15 September 2025 | 22 August 2025 |
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