Analysts from stockbroker Barrenjoey say they have “some sympathy” for pubs billionaire Bruce Mathieson snr in his push to try to lift Endeavour Group’s performance, but say his aggressive campaign overplays the extent of the problems.
Analysts led by Tom Kierath say the Endeavour hotels business has largely been a low-returning business for the past 14 years, most of that period under the ownership of supermarkets giant Woolworths.
Mr Kierath and his team have cut their predictions for where they think Endeavour shares will be trading at in 12 months from $5.80 to $5.40, but have a “neutral” rating on the stock on the basis that a de-rating by investors because of poker machine regulatory risk has already occurred.
“While we have some sympathy for major shareholder Bruce Mathieson’s ‘Endeavour to do better’ campaign, we think it largely overshoots the mark,” Mr Kierath said.
Endeavour Group chief executive Steve Donohue at the Crows Nest Hotel in Sydney.
He said Endeavour shares had fallen in the past year from $7.40 to around the $5.20 mark as Australia reopened after the COVID-19 pandemic, the market became more focused on gaming regulation, and bond yields rose.
Mr Kierath said Endeavour’s liquor retailing market share losses “have been small which require strategy tweaks rather than an overhaul”.
Mr Mathieson snr has launched a full-scale campaign to try to have former Woolworths executive Bill Wavish elected to the Endeavour board to try to engineer a shake-up.
The Endeavour board has opposed the election of Mr Wavish. Endeavour’s chief executive is Steve Donohue.
On Friday, Proxy firm CGI Glass Lewis advised clients to vote against the election of Mr Wavish to the board of Endeavour. CGI Glass Lewis was the
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