Endeavour Group Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

·3-min read

Shareholders of Endeavour Group Limited (ASX:EDV) will be pleased this week, given that the stock price is up 18% to AU$7.41 following its latest half-year results. It looks like a credible result overall - although revenues of AU$6.3b were in line with what the analysts predicted, Endeavour Group surprised by delivering a statutory profit of AU$0.17 per share, a notable 18% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Endeavour Group after the latest results.

View our latest analysis for Endeavour Group


Taking into account the latest results, Endeavour Group's ten analysts currently expect revenues in 2022 to be AU$11.7b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be AU$0.28, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$11.7b and earnings per share (EPS) of AU$0.25 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of AU$7.11, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Endeavour Group at AU$8.10 per share, while the most bearish prices it at AU$5.40. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Endeavour Group's past performance and to peers in the same industry. We would highlight that Endeavour Group's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2022 being well below the historical 142% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Endeavour Group.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Endeavour Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Endeavour Group's revenues are expected to perform worse than the wider industry. The consensus price target held steady at AU$7.11, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Endeavour Group analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Endeavour Group that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.