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    Learn Why The Bull Case For Endeavour Group (ASX:EDV) Could Change Following Cost Cut Delivery

    Simply Wall St·10/23/2026 23:24:46
    Listen to the news
    • Endeavour Group has drawn attention after commentary compared its higher P/E ratio with industry peers and highlighted a weaker long-term performance record relative to recent gains.
    • The spotlight has shifted to whether a planned A$300m cost reduction and hotel renewal program can support earnings strongly enough to justify the richer valuation.
    • We will look at how Endeavour Group's investment narrative holds up now that its rich P/E hinges on executing the A$300m cost program.

    Compare Endeavour Group's rich P/E story with other potential opportunities by scanning our handpicked 4 high quality undervalued stocks that pair stronger fundamentals with more grounded valuations.

    Endeavour Group Investment Narrative Recap

    To own Endeavour Group here, you need to believe the A$300m cost reduction and hotel renewal plan can turn a low margin, capital hungry operation into a cleaner, more efficient retailer and hospitality group. The recent share price move has not changed the key near term catalyst. Delivery of meaningful cost savings without hurting service levels still carries the most weight.

    The biggest risk remains that stubborn wage and operating cost pressure, combined with already reset pricing in retail liquor, eats into those savings before they hit the bottom line. If that happens, a rich P/E and thin 0.4% net margin start to look more exposed than transformed.

    The most relevant update here is management’s timeline around the A$300m cost out program, with A$100m targeted by FY27 and most initiatives for that year already executed. This is the operational anchor that current Endeavour Group sentiment is hanging on, because it is one of the few levers that can shift earnings without relying on stronger consumer demand.

    For you as an investor, the task is judging whether those savings can offset inflation in wages and hotel running costs, while the hotel renewal pipeline and Dan Murphy’s value repositioning bed down. If execution slips, the combination of elevated capex, weaker free cash flow and interest that is not well covered by earnings can quickly become the dominant part of the story.

    Endeavour Group Forecasts Baked Into The Current Story

    Analysts are effectively asking you to judge whether Endeavour Group can grow into its current valuation using fairly specific assumptions on sales, profit and capital intensity. Revenue is projected to rise by 2.5% each year over the next three years, while net margins are expected to lift from 0.4% today to 3.1% by around 2029. That combination would move the group away from a thin profitability profile toward something more in line with a mature retailer and hospitality operator, but it relies on both the A$300m cost program and the hotel reinvestment plan working as intended.

    On earnings, the gap between today and the analyst consensus is large. Current profit of A$52.0m is expected to reach A$410.2m by about 2029, which is roughly a 7.9x increase in absolute terms. Some forecasters are more optimistic, with estimates up to A$537.0m, while others sit closer to A$366.6m, so there is clear disagreement on how much of the cost savings and hotel uplift will ultimately show up in the income statement. For you, the key question is whether a move from a very low net margin to just over 3% feels realistic given wage inflation, higher running costs and the pricing reset already completed in retail liquor.

    The valuation bridge also leans heavily on a big reset in Endeavour Group's P/E multiple over time. To line up with the consensus price target, the stock would need to trade on 17.6x those A$410.2m earnings by 2029, down from 113.3x today and below the current 37.3x P/E figure quoted for the broader AU Consumer Retailing industry. That shift implies less of a growth premium and more of a regular retail and hospitality profile, but with higher profits attached. Analysts are also assuming a small 0.11% yearly reduction in the share count, which would give a modest extra lift to earnings per share if it plays out.

    Price targets themselves are tightly clustered around where Endeavour Group changes hands today. The consensus sits at A$3.20 per share, only 2.6% below the current A$3.28 price, with a range from A$2.30 to A$5.10. That narrow gap between market price and the average target suggests analysts on balance view the stock as roughly fairly priced on their numbers. For anyone considering the shares, it puts even more focus on whether those margin and earnings assumptions feel achievable rather than stretched.

    Endeavour Group's current analyst playbook points to A$13.2b in revenue and A$410.2m in earnings by 2029. That outcome rests on 2.5% yearly revenue growth and an earnings increase of roughly 7.9x from A$52.0m today.

    Uncover why Endeavour Group's fair value indicates a 3% potential downside to its current price, leaving little room for error if expectations slip.

    ASX:EDV 1-Year Stock Price Chart
    ASX:EDV 1-Year Stock Price Chart

    Exploring Other Perspectives

    You can also weigh a very different angle on Endeavour Group that focuses less on the A$300m cost plan and more on pressure from heavier capex and rising finance costs. The lowest analysts were working off about A$13.0b of 2029 revenue and A$366.6m of earnings, so their pre news view already built in a tougher road than consensus.

    Explore 5 other Endeavour Group fair value estimates, including one that suggests as much as 31% downside from the current price.

    Form Your Own Verdict

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

    Looking for more investment ideas beyond Endeavour Group?

    Once you have a view on Endeavour Group, it can help to line it up against other listed businesses that offer different mixes of quality, risk and income. The Simply Wall St Screener lets you do that quickly by filtering for traits that match what you want from a portfolio, whether that is resilience, yield or growth potential.