Endeavour Group Ltd (ASX: EDV) shares are falling again on Tuesday morning.

At the time of writing, the ASX 200 stock is down a further 3% to a new record low of $4.36.

What's going on with this ASX 200 stock?

Investors have been selling the $8 billion drinks giant's shares this week following the release of a disappointing trading update.

Endeavour's update revealed a beat for its Hotels business against consensus estimates, but a miss for its Retail (BWS/Dan Murphy's) business.

Commenting on the update, Goldman Sachs said:

EDV reported 1Q25 trading update with Retail sales miss offset by Hotels sales beat. Company's 1H25 Retail EBIT margin guidance was also worse than expected. Reflecting the update and management call commentary, we revise our FY25/26/27 group sales down by 2.3% – 3.2% and EBIT by 7.3%-5.9% largely due ~3-4% lower Retail sales and ~9-11% lower EBIT.

Nevertheless, even after downgrading its earnings, the broker believes the selling has been severely overdone. Particularly given its belief that we are not witnessing a structural decline in alcohol retail. It adds:

Market concern over alcohol consumption structural decline overdone. Per Euromonitor, Australia's per cap consumption of alcohol is already one of the highest in the world in both volume/value terms. […] Whilst per cap consumption volume has been on a downtrend (-1.6% 09-19), population growth, positive mix/price have driven industry growth.

Another positive is that the broker thinks the ASX 200 stock is well-positioned to capitalise on its market share gains when trading conditions recover. It explains:

Market share gains will position the Company well for category recovery. Whilst the Liquor category is currently challenged, we agree with management's focus on market share gain while keeping reasonable level of profitability. Excluding One Endeavour costs, Our FY25e Retail EBIT margins of 6.6%, whilst below FY24 7.0% is still in line with FY19 margin of 6.6%.

Time to buy

In light of the above, Goldman has reaffirmed its buy rating with a trimmed price target of $5.50 (from $6.60).

Based on its current share price, this implies potential upside of 26% for investors over the next 12 months.

In addition, a 4.5% fully franked dividend yield is expected by the broker in FY 2025, boosting the total potential return beyond 30%.

Our TP is reduced to A$5.50/sh (from A$6.20/sh) with our valuation methodology of 50/50 SOTP and DCF unchanged. This implies ~26% TSR [now 30%] and we retain Buy.