Workday price target lowered to $275 from $288 at Piper Sandler

Piper Sandler lowered the firm’s price target on Workday to $275 from $288 and keeps an Overweight rating on the shares. While leadership kicked off the 2023 financial analyst sessions with the narrative squarely focused on “opportunity, opportunity, opportunity,” the target medium term subscription growth outlook was reset to 17%-19% vs. 20% last year, reflecting a slightly more conservative stance as the new CFO takes over the reins and the reality of macro headwinds becoming the “new normal” has firmly set in, the firm notes. That said, Piper is “encouraged” by meaningful upside levers to this revised outlook, including elevating partner sourced new ACV contributions that were only 3% last year, increasing quota carrying capacity in FINS, potential $2B of upsell expand opportunity at the top 100 customer cohort, and international expansion with new leadership and new SME playbooks.