Clicks Group is a health and beauty-focused retail and supply group. Through its market-leading retail brands, the group has hundreds of stores across southern Africa, while United Pharmaceutical Distributors (UPD) has close to a third of SA’s private pharmaceutical wholesale market share.
Clicks has maintained a resilient performance over time amid economic headwinds, supported by strong cash generation and defensive demand for healthcare products and services.
Technically, a developing Elliott Wave one structure makes the share an interesting candidate for a long position (see the insert on the main chart). The emergence of Wave one often marks a pivotal shift in market sentiment, typically following a period of consolidation or corrective decline.
The rising Moving Average Convergence Divergence (MACD) histogram on the weekly chart signals weakening selling pressure and fading bearish momentum. Paired with higher lows, this points to growing upside potential.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R375.
Technical analysis
The Fisher Transformation indicator signals renewed bullish momentum by highlighting clearer turning points in price trends. When the Fisher line crosses above its signal line from oversold levels or starts rising after a decline, it suggests fading downside momentum and emerging buying pressure.
The lower panel shows changes in the technical scoring model, which combines multiple indicators into a single measure of market strength. A smoothed average is used to reduce noise, and when this score turns upward from a low point, it may indicate improving technical conditions and the start of a bullish reversal.
Our entry range is between R356 and R375. A move away from this range will signify a change in trend and would negate this trade idea.
Our target price is R413, representing upside of ~13% from current levels.
Our proposed time to exit is towards mid-March 2026, though investors can adjust for either a longer or shorter time horizon, depending on price behaviour.
A drop below R347 (downside of ~5.1% from current levels) would imply weakening technicals. As such, a stop-loss is recommended at this level.
Long-term fundamental view
Clicks has proven to be an excellent competitor in the retail and distribution space. The company is led by a strong management team who has improved various operational efficiencies, lowered costs, reduced excess investment in working capital and enhanced product availability.
The company boasts a high return on equity (ROE), has minimal debt and is highly cash generative, with its interim results to the end of February showing solid performance, with double-digit growth in earnings and dividends, supported by margin expansion from private label products and a recovering distribution segment.
Growth is expected to improve in the second half as the pace of store rollouts picks up. UPD continues to show positive momentum and is likely to contribute meaningfully to top-line growth, with improving margins reducing its previously dilutionary effect following recent system enhancements.
In addition, the group continued to expand its retail footprint, opening its 950th Clicks store and growing the pharmacy network to 740 locations, with 29 new pharmacies added so far this year.
Key risks to our fundamental view include regulatory intervention within the pharmaceutical sector, increased competition from food retailers introducing pharmacy offerings, and tariffs that pose supply chain and global growth risks that may slow down discretional spending.
