PEXA Group Ltd (PXA.AU) shares plummeted 5.01% during intraday trading on Thursday, as regulatory uncertainty weighed on investor sentiment.

Analysts at Jefferies lowered their price target for PEXA Group to A$13.40 from A$16.00, while maintaining a "hold" rating. The firm cited regulatory risks stemming from the Independent Pricing and Regulatory Tribunal of New South Wales (IPART) shifting towards a building-block model for electronic lodgement network operator (ELNO) fees. Jefferies noted that uncertainty around the model's inputs poses a risk, and that the Australian Registrars' National Electronic Conveyancing Council could set prices below what PEXA can charge under the current regime, potentially limiting the company's pricing power and profits.

The company acknowledged an update provided by IPART, which released a methodology paper outlining its preferred approach for establishing an initial asset base for an ELNO. The regulatory review aims to set fees around efficient costs, which analysts suggest could cap profits above a normal return for PEXA.