No happy hour for alcohol retailer Endeavour as costs, regulator concerns weigh, Citi says

Endeavour

27/08/2024 24:27

** Citi cuts price target on Australian alcohol retailer and
hotels operator Endeavour Group  EDV.AX  to A$5.18 from A$5.78,
maintains "neutral" rating
    ** EDV on Monday reported in-line FY24 profit of A$512 mln
($346.68 mln), down ~17% from the prior year
    ** EDV stock closed down ~7% at A$5.150 on Monday - its
lowest level since July 12
    ** Brokerage says EDV faces a slew of headwinds including
inflation, potential gaming regulatory changes, and rising costs
to separate its technology from that of its former parent,
Woolworths  WOW.AX 
    ** Inflation changing consumer behaviours: per capita
alcohol consumption is trending lower, consumers are preferring
well-known brands over new brands, with a market relying on
promotions threatening margins - Citi
    ** Brokerage trims its earnings view for FY25 and FY26 by 9%
and 7%, respectively
    ** Eight of 14 analysts rate EDV "buy" or higher, five
"hold", and one "sell"; their median PT is A$5.80 – LSEG data
    ** EDV down 1.2% this year, as of last close


($1 = 1.4769 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))