*DJ Xero Price Target Raised 23% to NZ$33.40/Share by Deutsche...

*DJ Xero Price Target Raised 23% to NZ$33.40/Share by Deutsche Bank


Accounting software company Xero is making strides with its growth outside its home markets of Australia and New Zealand, with its customer base growing strongly in the UK and several earlier stage markets, leading Deutsche Bank to lift their long term revenue estimates.

DB also thinks Xero is well on track to reach a breakeven point, enabling it to self-fund future growth. But while they think FY earnings will beat consensus estimates of NZ$27M, the investment bank thinks its operating leverage will be much lower in the medium term as the company re-invests growing profits from its maturing operations in Australia, NZ and UK into the new markets. Xero typically loses money for around five years in a new market, they say.