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Endeavour Group Faces Structural Consumption Headwinds, Says Jefferies

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Endeavour Group (ASX:EDV) is facing structural headwinds to alcohol consumption, alongside a challenging consumer spending environment, which explains why management has not provided explicit earnings growth targets, according to a Thursday Jefferies note.

Excess inventory is expected to support stock-related profits in fiscal year 2027, and there could also be upside if Coles Group (ASX:COL) exits the large-format liquor retail segment, the note added.

Jefferies said that regulatory risk related to gaming operations remains an ongoing concern, and although the valuation appears depressed, the pathway to growing gross profit faster than costs remains unclear.

Jefferies kept a hold rating on Endeavour and decreased its price target to AU$3.20 from AU$3.50.

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