Workday Stock Bounces Higher Pre-Market After Analyst Ups Price Target: Retail Sentiment Subdued

Workday, Inc. ($WDAY) shares advanced in Monday’s premarket session after an analyst upped the enterprise platform provider's stock price target.

Wolfe Research’s Alex Zukin hiked the price target for Workday stock from $290 to $320 and maintained an ‘Outperform’ rating on the stock, TheFly reported. The analyst said he hasn’t been “this excited and inspired” for the software sector in a long time. 

The analyst cited improving fundamentals, an easing regulatory environment, secular artificial intelligence (AI) tailwinds, and favorable capital market conditions as reasons for his optimism toward the industry.

The upward price target adjustment follows another by Mizuho Securities’ Siti Panigrahi. On Friday, the analyst lifted the price target for Workday stock from $280 to $320, also citing strengthening industry fundamentals. 

Workday also has an imminent catalyst, as it is all set to join the prestigious S&P 500 Index, before the market opens on Monday, Dec. 23, 2024. The company would replace Amentum Holdings, Inc. ($AMTM), which will be relegated to the S&P SmallCap 600 Index.

Workday stock rose over 5% to $279.91, the first trading session following the announcement regarding the S&P 500 inclusion. 

The S&P 500 Index, a market-cap-weighted index, is considered the best single gauge of large-cap U.S. equities. It includes 500 leading companies, accounting for about 80% of the available market capitalization. 

Index inclusion is typically positive, as funds holding portfolios mirroring the index buy stocks to maintain the respective weightings of the component stocks. These stocks also benefit from increased volume and liquidity due to purchases by index funds and ETFs.

WDAY sentiment and message volume December 16, 2024, as of 8:12 am ET | Source: Stocktwits

On Stocktwits, sentiment toward Workday stock has turned ‘bearish’ (43/100) from the ‘neutral’ mood that prevailed a week ago. The message volume remained ‘normal.’

A user of the platform cited ‘huge’ insider sales for his bearishness. Another pointed to the company’s choice to look past artificial intelligence as a cause of concern.

In premarket trading, as of 8:12 a.m. ET, Workday stock climbed 0.18% to $274.17. The stock is down about a percent for the year.

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