CWP – Morgans rates the stock as Hold

Cedar Woods Properties had guided to $43m FY20 profit pre-virus, but now the company expects $20-21m, down -57% on FY19. The disruption has pushed a material number of settlements into July, being FY21.

Pre-sales of $360m by June compares favourably with $330m in FY19, the broker notes, suggesting solid earnings certainty and an uplift into FY21-22. That said, a return to pre-virus earnings is unlikely until after FY22, but the broker highlights a strong balance sheet offering acquisition potential in a weak market.

Target rises to $5.34 from $5.14, Hold retained.

Sector: Real Estate.

Target price is $5.34.Current Price is $5.06. Difference: $0.28 – (brackets indicate current price is over target). If CWP meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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