Morningstar positive on Endeavour's divestment, bets on hotels, beverages business
BUZZ-Morningstar positive on Endeavour's divestment, bets on hotels, beverages business ** Morningstar says divesting noncore wineries and vineyards simplifies operations and reduces costs for Australia's Endeavour Group EDV.AX
** The pub operator said on Wednesday it will sell its wineries and vineyards, scale back its drinks business and cut its dividend payout to save about A$300 million ($214.83 million) by 2029
** The investment research firm says the market is expecting structurally lower long-term cost margins for co
** Morningstar sees liquor retailing sales for co to grow in line with inflation from fiscal 2027, says younger people are moderating their alcohol consumption, expects changes in drinking behavior
** Says cutting dividend payout ratio provides greater flexibility in funding hotel investments for EDV
** It maintains fair value estimate of A$5.4/share for EDV, expects co's price growth to return from 2027 coupled with gains from leaner operations
** YTD, stock down 21.9% as of co's last close
($1 = 1.3965 Australian dollars)
(Reporting by Aamir Sheik Khalid in Bengaluru)
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