Overview
Citizens downgraded Workday shares to Market Perform from Market Outperform on Wednesday, flagging a series of recent developments that prompted reassessment of the stock's near-term outlook. The move comes while the stock is trading close to its 52-week low of $139.91.
Triggers for the downgrade
The downgrade followed Workday's February 8 announcement that founder Aneel Bhusri would return as CEO effective immediately. On the same day the company preannounced fourth-quarter results, saying those results were in line with the guidance it provided during its fiscal 2026 third-quarter earnings call on November 25, 2025. Workday is set to publish its full quarterly earnings report on February 24.
Citizens analyst Patrick Walravens carried out business checks focused on the tone of activity at Workday prior to issuing the rating change. Citizens explicitly cited the CEO change, the preannouncement of fourth-quarter results, the findings from those business checks, and recent stock performance as the basis for adjusting its rating to Market Perform.
Market context
Workday's shares have fallen 33% year to date. Over the same period the S&P 500 and the Russell 3000 have remained roughly flat, underscoring the stock-specific pressures that analysts and investors are weighing.
Valuation and financial health assessments
Despite the recent share-price weakness and the downgrade from Citizens, InvestingPro analysis referenced in company commentary notes that Workday appears substantially undervalued relative to its Fair Value. That analysis also assigns Workday a "GOOD" overall financial health score and offers 15 additional insights covering profitability, growth potential, and relative valuation that are intended to assist investors during this period of heightened uncertainty.
Leadership transition and analyst reactions
The leadership change replaced Carl Eschenbach, who stepped down after three years, with co-founder Aneel Bhusri returning to the chief executive role. The move is occurring as the company navigates the evolving artificial intelligence landscape, a dynamic several firms cited in their own reassessments of the stock.
Brokerage reactions have been mixed. BMO Capital lowered its price target for Workday to $204, citing uncertainties in the application software sector and the management transition. Rosenblatt took a different tack, upgrading Workday to a Buy rating from Neutral and setting a price target of $180, pointing to the stock's valuation and the return of Bhusri as constructive factors. Stifel adjusted its price target to $175 from $235 while maintaining a Hold rating. Oppenheimer retained its Outperform rating and kept a price target of $270 despite the CEO change.
What to watch next
Investors will likely focus on the full earnings report when Workday releases its complete fourth-quarter results on February 24. Until then, analysts and shareholders appear to be balancing the implications of a leadership reset against the company's valuation metrics and reported financial health.