ASX real estate stock Cedar Woods Properties Ltd (ASX: CWP) drew significant investor attention yesterday.
The Australian property development company saw its share price rise by an impressive 10% on Wednesday.
This came on the back of positive guidance out of the company.
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Upgraded guidance
Cedar Woods Properties upgraded its guidance for FY 2026 again, which marks the second time it has done so this year.
In October, it upgraded the guidance for its FY26 profits to be 15% better than last year's net profit, up from the previous guidance of 10%.
Yesterday, the company upgraded this once again, saying FY26 full-year profit is likely to come in "at least" 20% higher than the full-year result for FY25.
The real estate stock has seen its share price grow by more than 60% year to date.
Bell Potter upgrades
Following the announcement, broker Bell Potter released a new report on this ASX real estate stock.
The broker said the primary driver of this early upgrade is the acceleration of momentum across the portfolio nationally, with several projects delivering a full years' worth of price growth within the first half, particularly across WA and QLD land projects.
It also highlighted improved enquiry and sales volumes in Victoria.
We believe the 1H skew (BPe 55%/45% 1H/2H) from the timing of settlements provided CWP with clarity and confidence to add a further +5% to earnings growth guidance. In our view, the 1Q upgrade was driven by strong conditions, and this further upgrade was driven by timing and visibility.
The broker also noted a positive outlook for the medium term.
It said medium-term growth confidence has improved as Cedar Woods Properties' expanding pipeline (around 30 projects contributing to FY27 earnings versus ~20 in FY25) and another six months of strong price growth are likely to drive better-than-expected revenues and margins.
Management's conservative guidance and focus on sustained, repeatable growth further supports confidence that the company can meet earnings growth expectations through FY27–FY28.
Upgraded price target
Based on this guidance, Bell Potter maintained its buy recommendation on this ASX real estate stock.
It also increased its price target to $10.00 (previously $9.70).
From yesterday's closing price of $8.80, this indicates a further upside of 13.64%.
We increase our FY26-FY28 EPS estimates by +3% to +5%. We maintain our Buy recommendation on CWP and increase our price target by +3.1% to $10.00. In our view CWP is still undervalued by the market (SP -2.5% QTD despite +10% today), trading on 12.5x despite clear visibility for strong growth over the medium term (+13% 3yr EPS CAGR).
The broker said there is potential for ASX 300 inclusion in March 2026.
