Oppenheimer increased its price target for Workday (NASDAQ:WDAY) to $255.00, up from the previous target of $240.00, and reiterated its Outperform rating for the company. The company is expected to report its Q2 earning on Aug 24.
According to analysts, although investor expectations for Workday’s shares have risen following a significant increase in the company’s valuation recently, they anticipate positive financial results for the second quarter. These results are expected to surpass the consensus subscription backlog estimate and show improved profit margins.
Oppenheimer’s analysis highlighted strong deal activity, positive momentum, increasing engagement levels, and the defensibility of Workday’s solutions. However, there might be a challenge in the growth of the backlog in the second quarter due to demanding year-over-year comparisons.
The firm believes that investors are underestimating the value of Workday’s Generative AI positioning. This perception could change if the company provides more insight into AI opportunities at the upcoming Investor Day/Rising conference next month.
