Cedar Woods Properties Ltd (CWP)
I am interested in your view of Cedar Woods Properties Ltd, I realise its price is rather variable. Is it a tactical sell around $7.5?, its PE is still attractive, but it has had a good run.
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Answer
Hi Frank,
This $600mn property developer illustrates that its not all doom and gloom in construction at the moment. They specialise in creating residential communities and commercial property developments, including land subdivisions, medium- and high-density apartments/townhouses, plus associated retail and commercial spaces, nothing too outside of the box. They adopt an end-to-end approach including acquisition to design, development, and sales.
In late April, CWP beat expectations with its 3Q update, increasing FY25 net profit guidance from +10% to +15%, and projecting even stronger profit growth into FY26, aided by solid presales for settlement next year . Their formula is working and the stocks reacted accordingly. Even after a strong run its valuation isn’t too daunting while its ~3% fully franked yield is ok.
With Australia facing a housing shortfall, and interest rates set to fall, especially after this weeks employment data, CWP looks well positioned into 2026:
- In line with our bullish outlook towards the ASX we can see CWP testing the $8.50 area in 2025, i.e. it has further upside.
- Accordingly we like the risk/reward towards CWP on dips into the $7 area, i.e. buying strong stocks into pullbacks.
