Endeavour Group's (ASX:EDV) electronic gaming machine (EGM) spend across Victoria and Queensland declined modestly for the first time since 2023, suggesting some impact from weaker consumer sentiment and a tougher macroeconomic backdrop, Jefferies said in a Thursday note.

Gaming expenditure in hotels and clubs in Victoria declined 2% year-over-year in August, from a 2% gain in July. Gaming expenditure in hotels and clubs in Queensland declined 1.3% year-over-year in August, from an increase of 3.8% in July.

Its hotels business has enjoyed a tailwind from EGM spend for some time, but any slowdown will compound operating deleverage as its management accelerates renewals.

The brokerage assigned a hold rating to Endeavour and a price target of AU$3 per share.