Broker Notes: Why analysts name Xero and IDP Education to buy now?
$Xero Ltd (XRO.AU)$: Citi has a buy rating and A$108.00 target price on Xero's shares.
Citi analysts think their forecast that Xero could grab 25% of the U.K.'s sole trader market might prove conservative with rival accounting software provider Sage not looking to compete in the segment. The analysts say in a note to clients that another positive read for Xero from Sage's 3Q update is that the U.K.-listed firm is not seeing any impact from deteriorating macro conditions.
$IDP Education Ltd (IEL.AU)$: Morgan Stanley has an overweight rating and A$35.00 target price on the stock.
Student placement and testing firm IDP Education will beat market expectations and more than double FY 2022 earnings, Morgan Stanley analysts say in a note. The analysts tell clients that they expect IDP to report annual Ebit of A$155.4 million, which is 116% higher on year and about 2% higher than the average analyst forecast. They expect reopened borders and increased global mobility to lift student placement volumes by 48% on FY 2021. Ebit margin should expand by 525 bps to 18.8% on those higher volumes and cost synergies, they add.
Citi analysts think their forecast that Xero could grab 25% of the U.K.'s sole trader market might prove conservative with rival accounting software provider Sage not looking to compete in the segment. The analysts say in a note to clients that another positive read for Xero from Sage's 3Q update is that the U.K.-listed firm is not seeing any impact from deteriorating macro conditions.
$IDP Education Ltd (IEL.AU)$: Morgan Stanley has an overweight rating and A$35.00 target price on the stock.
Student placement and testing firm IDP Education will beat market expectations and more than double FY 2022 earnings, Morgan Stanley analysts say in a note. The analysts tell clients that they expect IDP to report annual Ebit of A$155.4 million, which is 116% higher on year and about 2% higher than the average analyst forecast. They expect reopened borders and increased global mobility to lift student placement volumes by 48% on FY 2021. Ebit margin should expand by 525 bps to 18.8% on those higher volumes and cost synergies, they add.
Buy: Also known as strong buy and "on the recommended list." Needless to say, buy is a recommendation to purchase a specific security.
Sell: Also known as strong sell, it's a recommendation to sell a security or to liquidate an asset.
Hold (Neutral): In general terms, a company with a hold recommendation is expected to perform at the same pace as comparable companies or in line with the market.
Underperform: A recommendation that means a stock is expected to do slightly worse than the overall stock market return. Underperform can also be expressed as "moderate sell," "weak hold," and "underweight."
Outperform: Also known as "moderate buy," "accumulate," "add," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.
Sell: Also known as strong sell, it's a recommendation to sell a security or to liquidate an asset.
Hold (Neutral): In general terms, a company with a hold recommendation is expected to perform at the same pace as comparable companies or in line with the market.
Underperform: A recommendation that means a stock is expected to do slightly worse than the overall stock market return. Underperform can also be expressed as "moderate sell," "weak hold," and "underweight."
Outperform: Also known as "moderate buy," "accumulate," "add," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.
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