Endeavour Group's (ASX:EDV) price investment strategy has stimulated demand and reversed its share loss, but with sales growth still well below inflation, more price investment may be required, according to a Tuesday Jefferies note.

The company on Tuesday reported sales for the 27 weeks in the fiscal first half ended Jan. 4 rose to AU$6.68 billion from AU$6.62 billion a year earlier.

Cost reduction initiatives could provide some offset, but Endeavour Group has already made reasonable progress on costs, and further cost cutting at BWS is difficult due to its labor-intensive operating model, the note added.

The investment firm said it is still too early to take a positive view, particularly given the share price held up relatively well after the trading update.

Jefferies kept a hold rating on EDV with a price target of AU$3.60.

Endeavour Group's shares rose almost 3% in recent Wednesday trade.