BUZZ — Jefferies cuts ASX — listed Xero's PT amid AI risks and stiff US competition

* Jefferies cuts price target on ASX-listed Xero to A$67 from A$77 * Brokerage says AI unlikely to replace the software firm's accounting software but AI agents may own the user interface and workflow layer, running the risk of making XRO a “headless” accounting software, constraining pricing power * Notes US small business accounting is getting more competitive and Xero needs to spend more on US marketing to win customers and build its brand * Lauds XRO's product offering and its efforts to embed AI, but also flags that monetisation of these products is still fairly limited * Cuts its EPS estimate on the company by 8% in FY27 and 7% in FY8 due to higher interest costs and US losses * Avg rating of 13 analysts is "buy" or higher; their median PT is A$118.5, LSEG-compiled data shows * Stock down nearly 48% so far this year as of last close (Reporting by Aamir Sheik Khalid in Bengaluru) ((Aamir.SheikKhalid@thomsonreuters.com)