No happy hour for alcohol retailer Endeavour as costs, regulator concerns weigh, Citi says
** Citi cuts price target on Australian alcohol retailer and hotels operator Endeavour Group EDV.AX to A$5.18 from A$5.78, maintains "neutral" rating
** EDV on Monday reported in-line FY24 profit of A$512 mln ($346.68 mln), down ~17% from the prior year
** EDV stock closed down ~7% at A$5.150 on Monday - its lowest level since July 12
** Brokerage says EDV faces a slew of headwinds including inflation, potential gaming regulatory changes, and rising costs to separate its technology from that of its former parent, Woolworths WOW.AX
** Inflation changing consumer behaviours: per capita alcohol consumption is trending lower, consumers are preferring well-known brands over new brands, with a market relying on promotions threatening margins - Citi
** Brokerage trims its earnings view for FY25 and FY26 by 9% and 7%, respectively
** Eight of 14 analysts rate EDV "buy" or higher, five "hold", and one "sell"; their median PT is A$5.80 – LSEG data
** EDV down 1.2% this year, as of last close
($1 = 1.4769 Australian dollars)
Reporting by Sameer Manekar in Bengaluru
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