Broker Notes: Why analysts name Ramsay, Qantas and Xero to buy now?

$Ramsay Health Care Ltd (RHC.AU)$: Jefferies has a buy call and A$65.40/share price target on Ramsay.
After the KKR-led consortium opted not to improve its previous proposal to acquire Ramsay Health Care, Jefferies takes the view that it's back to business as usual for the Australian private-hospital operator. In a note, analyst David Stanton says Ramsay's Australian business will see its 1H Ebit again dented by Covid impacts. "That said, Ramsay should be stronger over the longer term," Stanton says. "However, in the short term, staffing shortages will continue, which means that Ramsay may not be able to capture increased volume."

$Qantas Airways Ltd (QAN.AU)$: J.P. Morgan raises its target price on the stock by 2.8% to A$7.40 and maintains an overweight rating.
Qantas Airways shouldn't be trading at a discount to its U.S. peers, against which it looks well placed in comparison, J.P. Morgan analysts say. They tell clients in a note that Qantas has traded at a 10% discount to U.S. airlines in terms of enterprise value-to-Ebitda ratio. This looks odd to them given what they see as a superior domestic market structure in Australia, Qantas's larger market share and the Australian carrier's restructured, more variable cost base.

$Xero Ltd (XRO.AU)$: Citi has a buy rating and A$106.80 target price on the stock.
Xero's elevated R&D expenditure is likely due to the cloud-accounting firm's move to rewrite the code base of its platform, Citi analyst Siraj Ahmed says in a note. He reaches this conclusion after reading a media interview with Xero's chief technology officer, who noted that the software's current architecture may be limiting product development. Ahmed tells clients that the initiative could be limiting the speed with which Xero is bringing new products and functions to market, but sees potential that Xero's leverage could increase and its product development hasten after completion.