BMO Capital cut its price target for Workday shares (NASDAQ:WDAY) to $204 from $285 but left its Outperform rating intact. The firm pointed to mounting uncertainties affecting application software companies broadly and highlighted a management change at Workday, where the company’s co-founder is resuming the CEO role.
Market metrics cited in the note include a price-to-earnings ratio of 61.17 and shares trading close to a 52-week low of $140.59. Separate data indicates that, even amid these headwinds, the stock appears undervalued by some measures and that the company’s management has been an active buyer of shares through buybacks.
BMO described the fiscal fourth-quarter results as a pivotal read for the company as it navigates a backdrop of softer HR-related trends and a customer investment environment that did not materially shift at year-end. The firm emphasized that the reinstated CEO’s return underscores the need to recalibrate expectations while the company adapts to the influence of artificial intelligence on finance and HR workflows.
The analyst note also reiterated Workday’s strength in supporting large enterprise customers and suggested that tangible signs of AI-driven bookings momentum could help arrest the stock’s slide; shares have lost about one-third of their value so far this year.
Recent company developments have drawn a range of responses from the sell-side. Workday announced that co-founder Aneel Bhusri is returning as CEO, replacing Carl Eschenbach, who is departing after a three-year tenure. Analyst reactions have been mixed:
- Rosenblatt upgraded the stock to a Buy, citing valuation and Bhusri’s return as favorable factors.
- Stifel lowered its price target to $175 but maintained a Hold rating, citing the CEO transition as a concern.
- Oppenheimer kept an Outperform rating with a $270 target, signaling continued confidence despite leadership change.
- Evercore ISI trimmed its target to $200, pointing to questions over growth trajectory and a lack of notable earnings surprises.
These divergent analyst moves reflect a balance of optimism about the company’s positioning and caution about short-term execution risks tied to leadership and the adoption curve for AI-enabled features in HR and finance products.
For investors and market participants, the key near-term milestones include the fiscal fourth-quarter results and any concrete evidence that AI bookings are accelerating — factors BMO flagged as potentially stabilizing for the share price.