** Citi retains "buy" rating on Australia's Xero Ltd XRO.AX and raises price target to A$185/shr from A$158.20/shr

** Citi expects focus on the accounting software provider's HY25 results to be on subscriber growth in its three core markets — New Zealand, Australia and the UK

** Xero reports 1H25 results on Nov 14; Citi expects 1H core earnings to be NZ$292 million ($172.95 million), 2% ahead of market consensus as broker sees costs growth to be slower than expected

** "Our analysis of app data suggests that the increase in promotions and performance marketing spend is driving growth in new customer acquisition, especially in the UK" — analysts from Citi

** The broker expects growth in average revenue per user of 14% YoY

** 13 of 16 analysts rate the stock "buy" or higher, three "hold" and none "sell" or lower; their median PT is A$157.50 — LSEG

** Stock has risen ~44% YTD, as of last close

($1 = 1.6883 New Zealand dollars)

(Reporting by Archishma Iyer in Bengaluru)

((Archishma.Iyer@thomsonreuters.com))