How Aussies putting down the drinks is impacting this alcohol retailer…
The post Has Dry July hit the Endeavour (ASX:EDV) share price? appeared first on The Motley Fool Australia. –
The Endeavour Group Ltd (ASX: EDV) share price is one to watch this month.
Shares in the Aussie drinks retailer have edged lower this morning — down 0.16% to $6.42 — but have managed to climb 7% in the past month. That may come as a surprise to many given we’re in the middle of “Dry July”.
What does Dry July mean for the Endeavour share price?
For those that don’t know, Dry July is a campaign to raise awareness and funds for people affected by cancer. People raise money by stopping alcohol consumption for the month and being sponsored.
One might think this could see a dip in alcohol sales throughout the month. Endeavour owns and operates popular alcohol retailers including Dan Murphy’s and BWS and many hospitality venues. However, the Endeavour share price has thus far been largely unaffected in July.
One thing to keep in mind is that share markets are inherently forward-looking. Investors are largely focused on future valuations and returns they can expect from their holdings. That means that immediate events may not always have the same effect as factors that could influence earnings more permanently going forward.
Another reason for the Endeavour share price resiliency is that Dry July is not an unforeseen event. Investors should factor in seasonal trends, including any impact from Dry July, in their earnings expectations.
The Endeavour share price listed on the ASX one month ago on June 24 as part of a spin-off from Woolworths Group Ltd (ASX: WOW). The company closed its first trading day with a $10.8 billion market capitalisation which has grown to $11.5 billion at the time of writing.
The Endeavour share price has edged higher since its recent IPO. That’s despite factors such as Dry July and even COVID-19 restrictions impacting on hospitality operations.
However, the flip side is that lockdowns could actually boost alcohol sales and household consumption like we saw in March 2020.
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.