Workday stock price target lowered to $290 from $310 at TD Cowen

Investing.com - TD Cowen has lowered its price target on Workday (NASDAQ:WDAY) to $290 from $310 while maintaining a Buy rating on the stock. The enterprise software company, currently trading at $219.01 with a market capitalization of $58.48 billion, is showing signs of being undervalued according to InvestingPro analysis.

The firm adjusted its outlook following attendance at Workday’s Rising conference and Analyst Day in San Francisco, where the company reset its medium-term growth expectations.

Despite lowering growth projections, Workday offset this news with announcements of higher margins and what TD Cowen described as "a more conservative growth bar" going forward.

The company also announced a $5 billion share buyback program through fiscal year 2027, coinciding with activist investor Elliott Management disclosing a $2 billion stake in the company.

TD Cowen noted that while macroeconomic conditions remain challenging based on their market checks, they were "impressed by the new tech roadmap" that Workday outlined during the events.

In other recent news, Workday has captured the attention of analysts with a series of strategic announcements and updates. The company has been active at its Financial Analyst Day and Rising events, where it unveiled a new acquisition and partnership. Workday acquired Sana for $1.1 billion and announced a partnership with Microsoft to enhance its Illuminate agent platform using Azure AI Foundry. Analysts have reacted positively, with Needham reiterating a Buy rating and a $300 price target, emphasizing confidence in Workday’s agentic strategy despite a slight reduction in near-term subscription revenue growth guidance. Bernstein also maintained an Outperform rating, highlighting Workday’s innovation and execution strategies. Evercore ISI raised its price target from $275 to $300, citing the company’s platform evolution and strategic acquisitions. BofA Securities reiterated a Buy rating, noting strong free cash flow growth and the introduction of a new flex credit pricing model. KeyBanc maintained its Overweight rating and $285 price target, acknowledging Workday’s updated financial framework for fiscal year 2028, which aims for a 12-15% subscription revenue CAGR and approximately 35% operating margin.

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