Endeavour Group Ltd (EDV) - Comprehensive analysis
The market is currently undervaluing Endeavour's long-term earnings outlook, which is considered defensive. Consumers are opting for more affordable options and purchasing in bulk for at-home liquor consumption. We believe that the recent performance in liquor retailing is indicative of cyclically weak demand driven by cost-of-living challenges. Nevertheless, we anticipate that liquor sales momentum will improve, with sales growth expected to stabilize in the mid-single digits starting from fiscal 2026. Over the long term, we view liquor demand as defensive, supported by factors such as inflation, population growth, and a structural shift towards premiumization. Additionally, earnings in the smaller hotels segment are demonstrating resilience.
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