Lockdowns seem to be the gift that keeps on giving the liquor retailing giant.
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The Endeavour Group Ltd (ASX: EDV) share price has broken its all-time high for the thirteenth time this month.
At the time of writing, shares in the liquor retailer and hospitality owner are trading for $7.21 – up 2.27%. This is slightly down from the intraday and record high of $7.23. For comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.35% lower.
While the company hasn’t made any market-sensitive announcements in months, its shares have continued to shoot for the moon.
Let’s take a closer look and see what is possibly going on with Endeavour shares.
Lockdown, lockdown, lockdown!
Every Australian city and state is either currently in, or has just left, a COVID-induced lockdown. The rapid spread of the Delta variant sees all of New South Wales, the Australian Capital Territory, Melbourne, and Darwin in lockdown. South-east Queensland, Cairns, Adelaide, and Perth have recently exited from stay-at-home orders.
Sydney, the capital of NSW and Australia’s largest city, has been in lockdown longer than any other city in this current outbreak. It’s a streak that looks unlikely to end soon. Melbourne and Canberra joined the harbour city in extending their lockdowns. Darwin entered a 3-day snap lockdown after a positive case travelled from Sydney to the northern city.
As The Motley Fool has previously reported, while challenging for many people and businesses, these lockdowns have been a boon for consumer staples – including bottle shops. Sales are increasing for ASX-listed grocers, big box stores and the like, as customers are stuck at home with limited shopping options – great news for Endeavour shareholders.
While Endeavour owns and operates a number of hospitality venues, the revenues they generate are dwarfed by those earned through its Dan Murphy’s and BWS brand stores.
In the most recent Woolworths Group Ltd (ASX: WOW) half-yearly report, Endeavour Group generated $419 million compared to $122 million from hotels. Endeavour’s revenue was up 24% on the prior corresponding period while hotels were down 45%.
The prospect of enduring lockdowns across Australia’s east coast, possibly for months on end, may be benefitting the Endeavour share price.
Another reason may be the bullish assessments of the company by brokers and analysts. Wilson Asset Management, for example, says Endeavour shares are ones it is interested in.
Endeavour share price snapshot
Since its IPO in late June, the Endeavour share price has increased 18%. In fact, just in the last month, it is up an incredible 11.6%. The ASX 200 is only 3.6% higher in the same time.
Endeavour Group has a market capitalisation of $12.6 billion.
Should you invest $1,000 in Endeavour right now?
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Motley Fool contributor Marc Sidarous owns shares of Endeavour Group Limited. 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.