Citi ups PT on Australia's Xero, says focus to remain on core markets
** Citi retains "buy" rating on Australia's Xero Ltd XRO.AX and raises price target to A$185/shr from A$158.20/shr
** Citi expects focus on the accounting software provider's HY25 results to be on subscriber growth in its three core markets — New Zealand, Australia and the UK
** Xero reports 1H25 results on Nov 14; Citi expects 1H core earnings to be NZ$292 million ($172.95 million), 2% ahead of market consensus as broker sees costs growth to be slower than expected
** "Our analysis of app data suggests that the increase in promotions and performance marketing spend is driving growth in new customer acquisition, especially in the UK" — analysts from Citi
** The broker expects growth in average revenue per user of 14% YoY
** 13 of 16 analysts rate the stock "buy" or higher, three "hold" and none "sell" or lower; their median PT is A$157.50 — LSEG
** Stock has risen ~44% YTD, as of last close
($1 = 1.6883 New Zealand dollars)
Reporting by Archishma Iyer in Bengaluru
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