If you're looking for exposure to the beaten down tech sector, then Xero Limited (ASX: XRO) shares could be the answer.
Last week, two leading brokers reiterated their bullish views on the cloud accounting company's shares in response to news that it has lifted its prices in the ANZ and UK markets.
What are brokers saying about the Xero share price?
According to a note out of Citi, its analysts have reiterated their buy rating and $108.00 price target.
Based on the current Xero share price of $82.93, this implies potential upside of 30% for investors over the next 12 months.
Citi commented:
We see Xero's decision to increase prices in ANZ and UK as an indication of the company's confidence in its position in its core markets. While the changes would not have a full impact in FY23e, we estimate the changes represent a 8% uplift to group ARPU and represents upside to our ARPU forecasts. An increase in churn is a factor to consider especially given the slowing economic outlook.
What else was said?
The team at Goldman Sachs is even more bullish on the Xero share price. Its analysts have retained their buy rating and $118.00 price target on the company's shares.
This suggests that there's potential upside of 42% for investors between now and this time next year.
Goldman appears to agree with Citi on these price increases. The broker also suspects that increases may be on the way for the rest of the business. It commented:
We remain confident Xero will be able to execute on these increases while preserving its existing subscriber base, noting their strong track record in putting through increases while driving churn lower. We would also not be surprised if NA/ROW markets were also considered for a pricing increase, given they previously followed ANZ/UK by 2 months in Nov-21.
