Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Gents, First a "thankyou" for everything you bring to your subscription service. It is the most practical and actionable in the marketplace! Just wondering (facetiously) if Endeavour Group is going to zero? Is it simply in the too hard basket, or is there a value you would nominate as fair pricing? Thanks for everything you cover.
Hi Tony,
We really appreciate the feedback, it’s what makes the long hours all worth it.
The bottom line is the “younger generation” are drinking less and companies such as Treasury Wines (ASX: TWE) and Endeavour Group Ltd (ASX: EDV) are being re-rated lower as many investors, like MM, put/leave them in the too hard basket due to the underlying headwind.
Interestingly, we read a similarly themed article on Friday when Ryan Gosling said it isn’t down to audiences to save cinemas, it is Hollywood’s “job” to keep cinemas afloat by making better films. It got us thinking that humans aren’t just social by choice – we’re biologically and psychologically built for it yet more and more people are WFH, eating Uber Eats and watching Netflix, it cannot be good for society and eventually something has to give as so much of current social interaction unfolds through a mobile phone.
Ultimately, we believe there will be an inflection point when people “get back out there” but for now it’s like catching a falling knife which is likely to fall harder than people can imagine, although perhaps they already have!
In terms of the business itself, Retail is the main problem – liquor sales are weak, margins have been pressured, and early FY26 trading still showed Dan Murphy’s and BWS sales down year-on-year. Hotels are holding up better – but are still likely to suffer as mortgage rates go up. We doubt EDV will go to zero – there is a lot of value in their asset base, offset by a reasonable amount of debt. New CEO Jayne Hrdlicka (Ex Virgin) took over on 1 January 2026 and has a lot of work to do.
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