It's been a rough week so far for Endeavour Group Ltd (ASX: EDV) shares. No way around it.
Yesterday, we covered the reaction to Endeavour's latest full-year earnings report, which saw the Dan Murphy's and BWS owner dive 1.43% to $4.14 a share. Today, the selling has continued, with Endeavour shares down another 2.55% at the time of writing to $4.04 each.
Yesterday's reaction was hardly surprising, though. For its 2025 financial year, Endeavour reported a drop in revenues, earnings and net profits. The dividend was also cut, leaving investors with little comfort.
But with Endeavour shares now down just over 4% year to date and 22% over the past 12 months, many investors may be wondering whether it is a good time to buy this stock. After all, drinks are among the most resilient products out there, and Endeavour's bottle shop chains remain the leading provider of drinks in Australia.
Well, let's see what an ASX expert reckons.
Analysts at Macquarie have just run the ruler over Endeavour's latest earnings report. Unfortunately, they didn't find much to like.
Macquarie sees further selling of Endeavour shares
Despite alcohol's reputation as an inelastic, recession-resistant business, Macquarie's analysts have come to the conclusion that alcohol sales are in a post-COVID "demand vacuum", which is damaging Endeavour's long-term profitability. They went on to say this:
Constructing a "line of best fit" and using a linear growth rate reflecting historical growth rates across 2017-19, we estimate another 12-18 months of demand weakness [for alcoholic beverages]. This backdrop is magnifying the impact of endogenous challenges facing the business around ERP upgrade and brand. Lowest price is not enough!
Despite Macquarie seeing some "momentum" with Endeavour's hotels business, with recent capital expenditure delivering a "15%+" return on investment within 12 months, Macquarie still isn't convinced that the overall business is turning a corner just yet.
The analysts have cut their earnings growth forecasts for Endeavour by 3%, 5%, and 5% over the 2026, 2027, and 2028 financial years, respectively.
As a result, analysts have retained an 'underperform' rating on Endeavour shares and have cut the 12-month share price target for Endeavour by 5% to $3.60 a share. If that turns out to be accurate, investors would lose another 10.45% from where the shares are sitting today.
Probably not what Endeavour's now-long-suffering investors would want to hear. Let's see if Macquarie is on the money, though.
At the current Endeavour share price, this ASX 200 stock is trading on a price-to-earnings (P/E) ratio of 15.7, with a trailing dividend yield of 4.95%.
