Broker Notes: Why analysts name Xero, Viva Energy and TPG Telecom to buy now?

$Xero Ltd(XRO.AU)$: Jefferies maintains a buy rating on the stock and cuts target price 8.3% by A$109.96.

Jefferies acknowledges that the prospect of another year of elevated R&D costs is disappointing, as was Xero's FY22 free cashflow. Yet he says in a note that all software-as-a-service metrics look healthy for the cloud-accounting software firm, and points to the company's promised longer-term focus on driving down costs as a percentage of revenue.

Shares are 9.44% higher at A$84.16.

$Viva Energy Group Ltd(VEA.AU)$: Jefferies has a buy call on Viva, with its price target lifting 6.7% to A$3.20/share.

Viva Energy's refining strength was on display in the four months through April, and Jefferies is more positive on the medium-term outlook for refining than he was prior to the pandemic.

Shares are 6.39% higher at A$2.83.

$CSR Ltd(CSR.AU)$: Jefferies downgrades the stock to hold from buy and cuts its price target by 16% to A$5.90/share.

Building materials supplier CSR faces a period of "capex catch-up" and the prospect of its current pipeline of work falling sharply in FY 2024, says Jefferies.

Shares are 0.58% lower at A$5.14.

$Graincorp Ltd(GNC.AU)$: Morgan Stanley downgrades the stock to equal-weight from overweight.

Morgan Stanleythinks think that high wheat prices and improved seasonal conditions suggest potential upside to the processor and marketer's FY23 outlook, but don't see enough to shift their A$10.70 target price on the stock.

Shares are 1.78% lower at A$9.93.

$TPG Telecom Ltd(TPG.AU)$: Macquarie cuts the stock's target price by 2.4% to A$8.00 and keeps an outperform rating.

TPG Telecom's subscriber growth over its fiscal 1Q was stronger than Macquarie analysts had anticipated, but the increase may come at a cost to the communications provider's average revenue per user.

Shares are 1.51% higher at A$6.05.