The Endeavour Group Ltd (ASX: EDV) share price has outperformed the ASX 200 this year, but could it still be a buy?
Endeavour shares have climbed 4% in the year to date. For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen nearly 13% since the start of the year.
At the time of writing, its shares are up 1.37% today to $7.01 apiece.
Let's consider the outlook for the Endeavour share price.
Is Endeavour a buy?
Endeavour is an ASX 200 consumer share operating brands including BWS, Dan Murphy's, Jimmy Brings and ALH Hotels.
Analysts at Goldman Sachs are recommending investors buy the Endeavour share price. Goldman has an $8.10 price target on the company's shares. This suggests 15% upside on the current share price.
Despite Tasmania's recent plan to limit player losses on gaming machines, Goldman does not believe this will impact Endeavour shares.
Endeavour sees this Tasmanian plan as "immaterial" to Endeavour's earnings and is positive on the company's long-term growth.
EDV has 150 Gaming Machines in TAS (c. 1.2% of total machines) which we estimate contributes to A$6mn in revenue (0.1% of group).
In our view, while this may offer short-term overhang, we have a more constructive view on EDV's longer-term growth aspirations as it may accelerate the speed of independent publicans exiting the industry due to the increasing cost and complexity of the operating environment.
Endeavour reported a net profit after tax (NPAT) of $495 million in FY22, up 11.2% on the 2021 financial year. Group sales overall for the company were $11.6 billion, on par with FY21. The company declared a final dividend of 7.7 cents per share.
Endeavour share price snapshot
The Endeavour share price has climbed 3.5% in the past year. In the past month, it has fallen 3%, while it has lost 1.5% in the past week.
For perspective, the ASX 200 has shed 12% in the last year.
Endeavour has a market capitalisation of nearly $12.6 billion based on the current share price.
