Should I rush to buy this ASX 200 giant currently near its 52-week low?

A number of analysts think this stock is cheap at current levels.

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Endeavour Group Ltd (ASX: EDV) shares have underperformed the market over the last 12 months.

During this time, the ASX 200 drinks giant's shares have lost over 20% of their value. This leaves them trading within sight of their 52-week low.

While this is disappointing for shareholders, has it created a buying opportunity for others?

Is it time to buy this ASX 200 giant?

A number of brokers believe that the Dan Murphy's and BWS owner's shares could offer big returns over the next 12 months.

For example, Ord Minnett currently has an accumulate rating and $6.10 price target on its shares and UBS has a buy rating and $6.00 price target on them. This implies upside of 14% and 12%, respectively, for investors from current levels.

In addition, both brokers are forecasting 4%+ dividend yields in FY 2024 and FY 2025, boosting the total potential return further.

They are not alone with their buy ratings. The most bullish broker out there is Goldman Sachs, which has a buy rating and $6.20 price target on the ASX 200 giant.

This price target suggest that Endeavour's shares could rise almost 16% over the next 12 months. And like the other brokers, Goldman is expecting attractive dividend yields from its shares in the coming years.

Goldman expects fully franked dividends per share of 22 cents in FY 2024 and FY 2025, and then 24 cents in FY 2026. This will mean yields of 4.1% for the next two years and then 4.5% the year after.

All in all, if the broker is on the money with its recommendation, you could expect to receive a 20% return on your investment over the next 12 months.

To put that into context, this would turn a $20,000 investment into $24,000.

Why buy Endeavour shares?

A few weeks ago, Goldman explained why it thinks this ASX 200 giant is a buy. It named two key reasons underpinning its buy rating. The broker explained:

Our Buy thesis on the stock is based on the following key drivers: 1) Market share gain (already 40% market share) in defensive alcohol retail from consumer data and loyalty advantages; 2) Organic reopening beneficiary with its hotels/pubs business back to pre-COVID sales/property. We believe EDV is trading at a relatively attractive valuation, with potential downside from EGM tax changes already fully priced in. We are Buy rated on EDV.

Overall, this could make it a top option for investors looking for high-quality options for their portfolio.

Motley Fool contributor James Mickleboro has positions in Endeavour Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

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