Bank of America just raised its EUR/USD forecast
Investing.com - BofA Securities has reduced its price target on Workday (NASDAQ:WDAY) to $278.00 from $295.00 while maintaining a Buy rating on the stock. The software company, currently valued at $61.8 billion, has demonstrated strong financial performance with a 15% revenue growth over the last twelve months. According to InvestingPro analysis, the stock appears slightly undervalued despite trading at premium multiples.
The adjustment comes as BofA analyst Brad Sills cited "somewhat mixed, though largely in line deal activity" for the company. Based on this assessment, the firm is not expecting upside to its estimate for Q2 current remaining performance obligation (cRPO) growth of 15.5% year-over-year. InvestingPro data shows the company maintains robust financial health with a current ratio of 2.07, indicating strong ability to meet short-term obligations.
Despite the price target reduction, BofA remains comfortable with its estimate for Q3 cRPO growth of 15.5% year-over-year, which would be flat compared to Q2 on an 80 basis point easier comparison. This confidence stems from commentary indicating healthy and consistent pipeline builds for the second half of the year. With earnings scheduled in just two days, investors can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research report.
On the margin front, BofA notes that Workday has no major investment cycles underway and remains committed to a balanced growth philosophy. The company has raised its fiscal year 2026 margin guidance by 50 basis points in each quarter since the initial Q3 fiscal year 2025 guidance.
As a result, BofA expects upside to its Q2 and fiscal year 2026 estimates for operating margin of 28% and 28.5%, respectively, despite the more cautious stance on revenue growth that led to the price target reduction.
In other recent news, Workday has made significant strides with its acquisition of Flowise, a low-code platform designed to enhance AI agent building capabilities. This move is intended to offer Workday’s customers and partners more efficient tools for developing AI agents in human resources and finance. Ahead of its fiscal second-quarter earnings report, multiple analyst firms have shared their perspectives on Workday’s stock. Oppenheimer has reiterated an Outperform rating, expressing optimism despite low expectations, with a price target set at $300. Cantor Fitzgerald initiated coverage with an Overweight rating, indicating confidence despite challenges such as slowing growth and potential AI disruptions, and set a price target of $265. Guggenheim maintained a Neutral rating, noting the challenging business environment and shifting IT spending priorities. Evercore ISI also held its Outperform rating, expecting a slight beat in subscription revenue guidance but no major changes in long-term growth forecasts. These developments highlight the varied analyst outlooks and strategic moves by Workday in the current market landscape.
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