It has certainly been a week to forget for one S&P/ASX 200 Index (ASX: XJO) stock. This stock closed trading at $6.26 a share last Friday. But during Monday's session, it dropped to a new 52-week and all-time low of $5.45.
I'm talking, of course, about the Endeavour Group Ltd (ASX: EDV) share price.
Endeavour is the company behind the Dan Murphy's and BWS bottle shop chains, as well as gaming operations around the country. It was spun out of Woolworths Group Ltd (ASX: WOW) back in 2019 and has lived on the ASX in its own right ever since.
On Monday, the company's stock was punished after the Victorian government revealed plans to make changes to poker machine laws. These include a proposed reduction of the load-up from $1,000 to $100, as well as the closure of gaming machine areas between 4am and 10am in all non-casino gaming venues.
Investors were brutal in their reaction to this announcement, pushing Endeavour to its new all-time low, which was well below its 2021 IPO share price.
Over the rest of this week, the ASX 200 stock did recover significantly and closed at $6.05 a share today. However, that still leaves Endeavour shares at a nasty 24.1% loss over the past 12 months.
So was this week a once-in-a-lifetime opportunity to buy Endeavour shares at these all-time lows?
Is this ASX 200's all-time low a perfect buying opportunity?
Well, at least one ASX broker thinks it might be. As we covered, ASX broker Goldman Sachs seems unfazed by the proposed Victorian gaming changes. The broker retained a buy rating on Endeavour shares. It also kept its 12-month share price target steady at $7.50.
If Goldman is on the money here, it would mean investors in this ASX 200 stock are poised to enjoy a return of almost 25% over the coming year. That's in addition to a decent dividend return of around 4% as well.
The broker acknowledged that the proposed changes could hurt Endeavour but reckons the markets are overblowing these concerns. Here's some of what Goldman had to say:
Whilst the latest unexpected announcement of VIC gaming regulation tightening is a negative catalyst and we would expect the stock to trade lower, we note that we have already earlier reduced the Hotel EV/EBIT to a lower 12x 1yr fwd multiple in our SOTP valuation to reflect the higher operational risk.
We await further implementation details/EDV commentary to assess specific magnitude and timing of impact. We continue to see EDV's Retail Division, which we value at 19x FY24e EV/EBIT to be performing strongly as the clear market leader.
If Goldman Sachs is on the money here, it could indeed be a great opportunity to buy Endeavour shares. And that's despite this ASX 200 stock already recovering significantly from Monday's new all-time low. But we'll just have to wait and see if Goldman is right on this one.
