Hi Judy,
Endeavour Group Ltd (EDV) continues to struggle as the younger generation drink less, the gym has become the new pub! However, this phenomenon is now built into the share price which is relatively cheap, although not meaningfully so. We can see the stock squeezing up towards $4 in the coming months, or 15-20% higher, but regard the stock now as a trading, as opposed to investing, opportunity until the business reinvigorates itself.
- EDV has fallen due to a succession of earnings downgrades, not multiple compression, a trend that’s hard to fight.
The company has a turnaround plan but the earnings aren’t yet evident: EDV is focusing on simplifying the business, targeting $300 million in cost savings by FY29, exiting most winery assets, and redirecting investment into its higher-performing hotels division.
Ventia Services Group Ltd (ASX: VNT) has maintained positive momentum in recent months through a series of major contract wins across transport, water and defence, while reaffirming FY26 guidance for 7–10% underlying earnings (NPATA) growth, cash conversion above 90%, and an EBITDA margin above 8.5%.
The market reacted cautiously to the appointment of a new CEO, not helped by the market trading well above its long term valuation at the time.
- We like VNT as a business, but we are not keen on the risk/reward around $6.15, a pullback below $5.50 wouldn’t surprise.
