Why the Endeavour (ASX:EDV) share price just hit a new all-time high

The share price is up almost 10% since its initial public offering (IPO).

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The Endeavour Group Ltd (ASX: EDV) share price is popping off like a bottle of champagne. At the time of writing, shares in the alcohol retailer are selling for $6.70 – up 1.82%. Earlier today they reached a new all-time high of $6.70 per share. That’s despite the S&P/ASX 200 Index (ASX: XJO) being down 0.73%.

While there haven’t been any market sensitive announcements by the company, there is a range of other factors that may be sending it to new heights.

Let’s take a closer look.

I’ll drink to that!

Lockdowns across Australia, especially Sydney, to curb the spread of the delta variant of COVID, have been a boon for consumer staples – including bottle shops. With consumers stuck at home and shopping options limited, grocers, big box retailers, and even liquor retailers have been living the high life.

While Endeavour does own and operate a number of hospitality venues – the revenues they generate are dwarfed by those earned through its Dan Murphy’s and BWS brand stores.

In the Woolworths Group Ltd (ASX: WOW) last half-yearly report, Endeavour Drinks generated $419 million compared to $122 million from hotels. Endeavour’s revenue was up 24% on the prior corresponding period while hotels were down 45%.

Investors may feel the financial benefit Endeavour experienced last year will return with these new lockdowns. This could be one reason why the Endeavour share price is up.

Conversely, it may also be the easing of restrictions in Victoria which are seeing investors treat Endeavour shares like they are on the top shelf of the bar.

Any downturn in Endeavour’s hospitality venues in New South Wales may be offset by an uptick in Victoria. A potential unlocking of pent-up demand as citizens leave their homes may see earnings rise greater than they otherwise would have.

The consumer price index (CPI) rose by 0.8% in the June quarter. The Australian Bureau of Statistics (ABS) says “COVID-19 related price changes” played a “significant” factor in this price rise.

Endeavour share price snapshot

The Endeavour share price is up 9.5% since its initial public offering (IPO).

If a savvy investor bought Endeavour shares when they troughed at $5.77 each, they would be sitting on a tidy 16.1% return on investment (ROI).

Endeavour Group has a market capitalisation of approximately $11.8 billion.

Should you invest $1,000 in Endeavour right now?

Before you consider Endeavour, you'll want to hear this.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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