On Monday, Endeavour Group Ltd (ASX: EDV) announced that Executive Chairman Ari Mervis resigned as Executive Chairman, citing disagreements with the Board.
According to broker Bell Potter, Lead Independent Director Duncan Makeig will assume the role of interim Chairman while overseeing the recruitment of a permanent Chair, intended to be appointed prior to 1 January 2026.
The broker released analysis on Endeavour Group shares following the resignation.
Lets see how the broker views the company on the back of this news.
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Liquor turnover declines
Endeavour Group is an alcoholic beverages retailer, hotel operator, and poker machines operator spun off from Woolworths in 2021.
Endeavour's portfolio includes Australia's largest retail drinks network mainly across its Dan Murphy's and BWS brands.
These account for approximately half of all off-premises retail liquor sales in Australia.
ABS retail trade data reported that Aus liquor retailing turnover fell 4.5% in June 2025 (R12m -1.0%), supported by a 3.3% rise in alcohol CPI.
Meanwhile, pokies expenditure growth in QLD and VIC (EDV's key markets) remains robust growing 3.9% and 9.6% YoY, respectively.
The broker said a recovery in liquor retail turnover would help it take a more positive stance on the stock.
Limited upside
Endeavour Group shares have struggled over the last year.
They have fallen roughly 21.66% in that span.
For context, the S&P/ASX 200 Index (ASX: XJO) has risen more than 13% in that same period.
Despite the leadership turnover, Bell Potter still has a somewhat positive view on Endeavour Group shares but retains a "hold" recommendation.
Endeavour Group shares closed yesterday at $4.16, and Bell Potter has a 12 month price target of $4.50.
This indicates a modest 8.2% upside from its current share price.
The broker sees some potential for liquor sales to improve if interest rates fall, as this could encourage more consumer spending.
However, they expect profit margins to come under pressure, particularly in FY26, due to increased price competition from Liquorland.
While trading at an historically low 12x EBIT / 15x PE and a 25% discount to COL, we see this as warranted given: Gross margin pressures; sticky wage inflation; implementation risks around the One Endeavour program; upcoming management change with a potential strategy pivot; and the possibility of a retightening in the EGM regulatory environment.
