Endeavour Group (ASX:EDV) - Share price, News & Analysis

Q: What is the Fair Price of EDV when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

EDV (A$7.69) is trading above our estimate of [[fair value]] (A$6.99)

EDV fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	2/6
Past Performance	2/6
Financial Health	3/6
Dividends	3/6

EDV Stock Overview

Endeavour Group Limited engages in the drinks retail and hospitality businesses in Australia.

Rewards

Earnings are forecast to grow 5.62% per year

Became profitable this year

Risk Analysis

Unstable dividend track record

Endeavour Group Competitors

Woolworths Group

ASX:WOW

AU$43.4b

Coles Group

ASX:COL

AU$23.9b

Metcash

ASX:MTS

AU$4.1b

GrainCorp

ASX:GNC

AU$2.1b

Price History & Performance

Summary of all time highs, changes and price drops for Endeavour Group
Historical stock prices
Current Share Price	AU$7.69
52 Week High	AU$7.92
52 Week Low	AU$6.00
Beta	0
1 Month Change	7.10%
3 Month Change	1.45%
1 Year Change	26.69%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	27.74%

Recent News & Updates

Jul 01

Endeavour Group (ASX:EDV) Is Doing The Right Things To Multiply Its Share Price

What trends should we look for it we want to identify stocks that can multiply in value over the long term? In a...

Shareholder Returns

	EDV	AU Consumer Retailing	AU Market
7D	1.5%	0.05%	-2.1%
1Y	26.7%	5.4%	-10.5%

Return vs Industry: EDV exceeded the Australian Consumer Retailing industry which returned 3.8% over the past year.

Return vs Market: EDV exceeded the Australian Market which returned -12% over the past year.

Price Volatility

Is EDV's price volatile compared to industry and market?
EDV volatility
EDV Average Weekly Movement	3.3%
Consumer Retailing Industry Average Movement	3.3%
Market Average Movement	10.0%
10% most volatile stocks in AU Market	16.7%
10% least volatile stocks in AU Market	4.5%

Stable Share Price: EDV is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: EDV's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2012	28,000	Steve Donohue	https://endeavourgroup.com.au

Endeavour Group Limited engages in the drinks retail and hospitality businesses in Australia. It operates retail drinks network across Dan Murphy’s and BWS stores, and a portfolio of licensed hospitality venues. Endeavour Group Limited was incorporated in 2012 and is headquartered in Surry Hills, Australia.

Endeavour Group Fundamentals Summary

How do Endeavour Group's earnings and revenue compare to its market cap?
EDV fundamental statistics
Market Cap	AU$13.77b
Earnings (TTM)	AU$487.00m
Revenue (TTM)	AU$11.58b

28.3x

P/E Ratio

1.2x

P/S Ratio

Is EDV overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
EDV income statement (TTM)
Revenue	AU$11.58b
Cost of Revenue	AU$7.83b
Gross Profit	AU$3.75b
Other Expenses	AU$3.26b
Earnings	AU$487.00m

Last Reported Earnings

Jan 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.27
Gross Margin	32.38%
Net Profit Margin	4.21%
Debt/Equity Ratio	41.3%

How did EDV perform over the long term?

See historical performance and comparison

Dividends

3.3%

Current Dividend Yield

72%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is EDV undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for EDV?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for EDV. This is calculated by dividing EDV's market cap by their current preferred multiple.
What is EDV's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$13.77b

EDV key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	16.2x
PEG Ratio	5x

Price to Earnings Ratio vs Peers

How does EDV's PE Ratio compare to its peers?

EDV PE Ratio vs Peers

The above table shows the PE ratio for EDV vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	19.5x
WOW Woolworths Group	30.9x	-68.6%	AU$43.4b
COL Coles Group	24.1x	9.6%	AU$23.9b
MTS Metcash	16.9x	6.2%	AU$4.1b
GNC GrainCorp	6.2x	-52.1%	AU$2.1b
EDV Endeavour Group	28.3x	5.6%	AU$13.8b

Forward PE

Price-To-Earnings vs Peers: EDV is expensive based on its Price-To-Earnings Ratio (28.3x) compared to the peer average (19.5x).

Price to Earnings Ratio vs Industry

How does EDV's PE Ratio compare vs other companies in the Global Consumer Retailing Industry?

Price-To-Earnings vs Industry: EDV is expensive based on its Price-To-Earnings Ratio (28.3x) compared to the Global Consumer Retailing industry average (15.3x)

Price to Earnings Ratio vs Fair Ratio

What is EDV's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

EDV PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	28.3x
Fair PE Ratio	23.5x

Price-To-Earnings vs Fair Ratio: EDV is expensive based on its Price-To-Earnings Ratio (28.3x) compared to the estimated Fair Price-To-Earnings Ratio (23.5x).

Share Price vs Fair Value

What is the Fair Price of EDV when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: EDV (A$7.69) is trading above our estimate of fair value (A$6.99)

Significantly Below Fair Value: EDV is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: EDV is poor value based on its PEG Ratio (5x)

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Future Growth

How is Endeavour Group forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

5.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: EDV's forecast earnings growth (5.6% per year) is above the savings rate (1.8%).

Earnings vs Market: EDV's earnings (5.6% per year) are forecast to grow faster than the Australian market (5.6% per year).

High Growth Earnings: EDV's earnings are forecast to grow, but not significantly.

Revenue vs Market: EDV's revenue (3.1% per year) is forecast to grow slower than the Australian market (5.1% per year).

High Growth Revenue: EDV's revenue (3.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: EDV's Return on Equity is forecast to be low in 3 years time (15.3%).

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Past Performance

How has Endeavour Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-3.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EDV has high quality earnings.

Growing Profit Margin: EDV became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: EDV's earnings have declined by 3.6% per year over the past 5 years.

Accelerating Growth: EDV has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: EDV has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Retailing industry (59.2%).

Return on Equity

High ROE: EDV's Return on Equity (13.6%) is considered low.

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Financial Health

How is Endeavour Group's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: EDV's short term assets (A$2.3B) do not cover its short term liabilities (A$2.7B).

Long Term Liabilities: EDV's short term assets (A$2.3B) do not cover its long term liabilities (A$5.1B).

Debt to Equity History and Analysis

Debt Level: EDV's net debt to equity ratio (18.6%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if EDV's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: EDV's debt is well covered by operating cash flow (78.3%).

Interest Coverage: EDV's interest payments on its debt are well covered by EBIT (4.2x coverage).

Balance Sheet

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Dividend

What is Endeavour Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.25%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: EDV's dividend (3.25%) is higher than the bottom 25% of dividend payers in the Australian market (2.75%).

High Dividend: EDV's dividend (3.25%) is low compared to the top 25% of dividend payers in the Australian market (6.87%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether EDV's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if EDV's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (71.6%), EDV's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (51.3%), EDV's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure

CEO

Steve Donohue

2.08yrs

Tenure

AU$3,686,691

Compensation

Mr. Steve Donohue has been Managing Director, Chief Executive Officer & Director of Endeavour Group Limited since June 22, 2020. He had been Managing Director of Endeavour Drinks at Woolworths Group Limite...

CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD2.50M) is about average for companies of similar size in the Australian market ($USD2.54M).

Compensation vs Earnings: Insufficient data to compare Steve's compensation with company performance.

Leadership Team

Experienced Management: EDV's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.

Board Members

Experienced Board: EDV's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/04 00:00
Earnings	2022/01/02
Annual Earnings	2021/06/27