Here’s why the Endeavour (ASX:EDV) share price is up 10% in a month

Shareholders would be saying “cheers” after seeing their returns.

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The Endeavour Group Ltd (ASX: EDV) has been flying in the last month – up 10.2% in the last 30 days.

At the time of writing, shares in the alcohol retailer are selling for $6.74 – down 0.88%. Earlier in the day, however, shares did reach a new all-time high of $6.91.

While the company has not made any price-sensitive announcements since first demerging from Woolworths Group Ltd (ASX: WOW), there are some external factors that may have played an important role.

Let’s take a closer look.

I’ll drink to that!

The biggest story of the last month is of course coronavirus. Australia’s sluggish vaccine rollout combined with the highly infectious delta strain of the virus has plunged almost every major metro area into lockdown sometime over the last month. The country’s largest city, Sydney, is in the middle of a nine-week minimum lockdown. South-East Queensland joined the harbour city over the weekend.

As previously reported, these lockdowns, while challenging for many people and businesses, have been a boon for consumer staples – including bottle shops. Sales are increasing for ASX listed grocers, big box stores and the like as customers are stuck at home with limited shopping options.

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 most recent Woolworths 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 that 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.

Yet, as most of the country is not in lockdown, its hospitality venues are not completely destroyed. Regional NSW and Queensland, and every other state, allow hospitality venues to be open in one form or another.

Endeavour share price snapshot

Since listing, the Endeavour share price has increased by 12%.

If an investor bought $10,000 worth of Endeavour shares at its lowest point of $5.77 and sold at its new high of $6.91, they would have made a tidy profit of about $1,975.

Given its current valuation, Endeavour Group has a market capitalisation of $12.2 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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