Workday stock price target maintained at $340 by RBC on modest Q2 beat

Investing.com - RBC Capital has reiterated its Outperform rating and $340.00 price target on Workday (NASDAQ:WDAY) following the company’s second-quarter earnings report. The target represents significant upside potential, with analyst targets ranging from $220 to $340. According to InvestingPro analysis, Workday currently appears fairly valued based on its comprehensive Fair Value model.

Workday delivered a modest beat in Q2 but only reiterated its subscription revenue guidance excluding Paradox, which led to shares falling approximately 4% in after-hours trading.

The company’s Q1 outperformance was consistent with recent trends, primarily driven by modest subscription revenue results that exceeded expectations. Current remaining performance obligations (cRPO) surpassed street estimates for the third consecutive quarter, indicating signs of stabilization.

Management increased its fiscal year 2026 operating margin guidance by 50 basis points, now projecting a year-over-year expansion of 310 basis points.

RBC Capital expressed continued encouragement regarding early artificial intelligence adoption trends and momentum within Workday’s partner network.

In other recent news, Workday’s latest earnings report has prompted several analysts to adjust their outlook on the company. The company delivered strong second-quarter results, exceeding expectations in subscription revenue, operating margin, and backlog. Notably, Workday has raised its fiscal year 2026 subscription revenue guidance to $8.815 billion, indicating a 14.2% year-over-year growth. Despite these positive figures, Piper Sandler lowered its price target to $220, maintaining an Underweight rating due to a mixed outlook. Similarly, KeyBanc Capital Markets reduced its price target to $285, citing uncertainty around Workday’s growth trajectory, although it retained an Overweight rating. Cantor Fitzgerald reiterated its Overweight rating with a $265 target, emphasizing AI renewals as a positive factor. Bernstein also lowered its target to $304, maintaining an Outperform rating after describing the quarter as "okay." Mizuho (NYSE:MFG) reaffirmed its Outperform rating with a $275 target, highlighting the company’s strong performance and updated guidance. These developments reflect varied analyst perspectives on Workday’s future prospects.

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