In Brief: Tasmea, Boab Metals, Cedar Woods & Pexa Group

Array
(
    [0] => Array
        (
            [0] => ((TEA))
            [1] => ((BML))
            [2] => ((CWP))
            [3] => ((PXA))
        )

    [1] => Array
        (
            [0] => TEA
            [1] => BML
            [2] => CWP
            [3] => PXA
        )

)

This story features TASMEA LIMITED, and other companies.
For more info SHARE ANALYSIS: TEA
The company is included in ALL-ORDS

This week's In Brief shines a light on two companies in the sweet spot of silver and mining, with two others facing challenges.

• Tasmea positioned to benefit from Australia’s ageing mining, infrastructure cycle
• Fully funded Sorby Hills project highlights Boab’s leverage to rising silver prices
• Cedar Woods sales remain resilient but are macro and cost pressures looming?
• Pexa Group outlook clouded by IPART pricing uncertainty

By Danielle Ecuyer

This week’s quote comes from Commvault’s State of Data Resilience – Australia and New Zealand, 6th Edition (2026).

“(…) many organisations across Australia and New Zealand (ANZ) are rapidly embedding AI into critical business operations, often without adequate safeguards in place to manage risks introduced by AI agents and AI-driven applications.”

Ageing assets and a pending specialist labour shortage

Canaccord Genuity initiated coverage of Tasmea ((TEA)), emphasising the industrial services group (market cap $1.5bn) is positioned in the slipstream of growth across resources and infrastructure end markets in Australia.

Some 70% of the company’s revenue is generated from mining and resource customers, with iron ore the largest exposure at around 38%.

The Pilbara is the key geographic location, with the region’s last major capex cycle occurring in 2007-2013, resulting in ageing assets between ten and twenty years old-plus.

Ageing infrastructure is flagged to underpin what the broker believes is a structural uplift in prolonged spending and maintenance intensity.

Against this backdrop, demand for Tasmea’s services is expected to lift. A shortage of skilled labour and increasing investment in electrical and transmission infrastructure also support Tasmea’s in-demand profile.

The broker points to the recent WorkPac acquisition in November last year as boosting the company’s ambitions to scale into a more challenging and supply-constrained labour market.

Notably, WorkPac can bring forth an acceleration in the speed and scale of moving labour across the company’s subsidiaries, thereby improving the pace of new contract wins and lowering dependence on subcontractors.

Australia, like many countries, is upgrading its infrastructure, specifically across transmission networks as well as Brisbane Olympic-related works.

Access to labour for tenders is becoming more important and offers a competitive advantage.

The stock is Buy rated with a $5.59 target.

A “silver” entry point

Shaw and Partners has retained its Buy rating for Boab Metals ((BML)) post release of the company’s March quarter report.

Construction of the Sorby Hills silver-lead project continued to progress over the period and is now fully financed, with Boab completing both equity and debt raisings over the quarter.

The analyst highlights production of first concentrate is now around 15 months away in 2H27, with early works started and a letter of intent issued to the preferred contractor for the DeGrussa Plant disassembly, relocation and reconstruction.

Shaw details the expected financial metrics for the project, including capex of -$264m, negative AISC of -US$14/oz payable silver post lead credits, a pre-tax net present value of $596m and a pre-tax internal rate of return of 47%.

For good measure: a negative AISC occurs when the value of the lead by-product more than covers the cost base allocated to silver. So the accounting cost of each payable ounce of silver becomes negative (thus a positive for the company’s bottom-line).

Estimated annual earnings (EBITDA) are $160m. The analyst stresses the project’s metrics look considerably better at spot commodity prices.

Boab is one of limited options for investors to gain exposure to silver on the ASX. Sorby Hills is viewed as an “advanced and robust project”, including one of the largest silver resources at 53Moz.

On average, the project is expected to produce 2.2Moz of silver annually and, at the current silver price of US$73/oz, that equates to cash flow generation of $270m (US$190m).

Shaw retains a Buy rating, ascribed High risk, and a target price of $1.40.

The recent sell-off in the share price is attributed to the ‘risk-off’ tone in the market due to the Middle East war. Boab is currently trading at less than 1x first full-year cash flow.

Navigating the inflationary headwinds

Cedar Woods Properties ((CWP)) announced its second-best sales result for the third quarter of FY26. Moelis notes presales of $788m currently represent 80% of management’s FY27 revenue forecast.

Over the last three years, the housing developer has generated average gross margins up to 31% in 1H26 from 25% in FY23, which the analyst attributes to strong like-for-like price growth.

In the core markets of Perth and Brisbane, average dwelling prices have risen by 51% and 67%, respectively, based on Cotality data.

Since FY24, volume growth has been flat through to forecast FY26, the analyst explains, although 1H26 earnings represented around 62% of FY26 net profit after tax guidance. Cedar’s earnings growth over the period has been generated from price and margin expansion.

Rising inflation, interest rates and the overall uncertain macro backdrop are viewed as a test for management’s ability to continue growing EPS over the medium term.

Although much of FY27 is de-risked via presales, Moelis points to the longer-term outlook as questionable and dependent on how the inflationary economic backdrop evolves.

Nevertheless, the latest quarter realised gross sales of 442 units and enquiries were also at record level of 9,663.

Management did point out sales enquiries have weakened in recent weeks as consumer confidence wanes under higher interest rates and Middle East concerns.

Some of the existing fixed-price construction contracts might also be subject to cost revisions.

Against this backdrop, Moelis lowers its price target to $9.80 from $10.22 while retaining a Buy rating on the stock.

The current FY27 PER of around 8.9x is viewed as already discounting the macro risks.

A valuation too hot to handle

Jarden downgraded Pexa Group ((PXA)) after the company’s 3Q26 update due to the IPART pricing overhang, which is not currently seen as discounted in the share price.

The update showed FY26 guidance at the upper end of the prior range, on the back of Australian market transaction growth of 7.3% y/y, which beat both the analyst’s and consensus expectations.

Rising rates could knock some of the sheen off the latest results in terms of volume growth.

Regarding the IPART pricing decision, a June draft report is the next catalyst.

The analyst updated its valuation model for PEXA by assuming the company’s assets will remain useful for longer and by increasing estimates of historical investment spending.

While these changes lifted the estimated value of PEXA’s regulated-style asset base to $209m from $167m, Jarden believes the market valuation still looks too high.

Based on the current share price around $12.70, the assumptions infer PEXA would need a much larger asset base of around $600m, even after including a $4.50 per share valuation for the UK business.

Jarden thinks this is unrealistic and does not believe potential adjustments or cost recoveries will be enough to close the large valuation gap, particularly as management did not strongly challenge the current methodology during a recent investor briefing.

Based on the March quarter update, EPS forecasts are tweaked lower and the target price is downgraded to $11.35 from $12.40.

The rating is also downgraded to Underweight from Neutral.

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms