The S&P/ASX 200 Index (ASX: XJO) share Endeavour Group Ltd (ASX: EDV) has seen its rating upgraded by three brokers, which could suggest it's a long-term opportunity.
Endeavour is the business that operates liquor stores like Dan Murphy's and BWS. It also owns a number of hotels around the country.
Over the last six months, the Endeavour share price has fallen 25%, as we can see on the chart below.
After this large decline, some investors are now seeing an opportunity.
Brokers upgrade ASX 200 share Endeavour
According to reporting by The Australian, the broker CSLA has upgraded its rating on Endeavour to accumulate with a price target of $5.25.
A price target implies where the broker thinks the share price is going to be in 12 months from now. Of course, it's just a guess, so there's no guarantee that any rise will happen.
CSLA's price target suggests that Endeavour shares could rise by 4% over the next year.
The broker Jefferies has raised its rating on Endeavour to a buy, with a price target of $6.50. That implies a large potential rise of 29%.
The third broker to increase its rating on the ASX 200 share was JP Morgan with a rating of overweight (meaning buy). The price target is $5.90, which suggests a possible rise of 17%.
Trading update recap
These calls come after the company released its trading update for the first quarter of FY24. This was for the 14 weeks to 1 October 2023.
It said that total sales were up 2.1% year over year to $3.09 billion. This included a 1.9% rise of retail sales to $2.54 billion and a 2.8% increase of hotel revenue to $553 million.
Endeavour revealed that customers are "searching for value and discovery, which is reflected in shifting category trends". New products remain a "key driver of customer engagement and growth.
The My Dan's program has reached 5.3 million active members with 600,000 additional members joining in the past 12 months. Members now account for almost 90% of Dan Murphy's sales, allowing the business to deliver personalised content and offers.
The ASX 200 share's hotel division's sales are benefiting from food and bar sales as patrons gathered in venues for major sporting events and Father's Day. It said it benefited from interest in watching Matildas. More patrons at venues reportedly offset softer gaming revenue. Christmas bookings in hotels are "already breaking records".
Endeavour said it's focused on profitable growth, while offering the best prices for customers.
Endeavour share price snapshot
Over the past year, Endeavour shares have fallen by around 30%, despite today's rise.