Citi Lowers Workday Price Target to $148 Amid Slowing Growth Concerns

Citi has reduced its price target for Workday, Inc. (WDAY) to $148 from a prior estimate, citing elevated macroeconomic pressures on enterprise spending and a slowdown in new license acquisition rates. The firm maintains a 'neutral' rating on the stock, indicating no strong conviction in near-term upside or downside. The downgrade reflects concerns over the sustainability of Workday’s growth trajectory, particularly in its core human capital management and financial management platforms. Workday reported second-quarter fiscal 2026 revenues of $914 million, up 13% year-over-year, but the growth rate marked a deceleration from prior quarters. The company’s subscription revenue, which accounts for over 95% of total sales, grew 12.8%, below the 15%+ pace seen in fiscal 2025. Analysts note that customer expansion remains strong, but new customer additions have declined in the past two quarters, particularly in mid-market segments. The revised target implies a potential 10% downside from WDAY’s closing price of $164.37 on March 5, 2026. The stock has traded in a range of $145 to $172 over the past 12 months, suggesting ongoing volatility amid shifting expectations. Other major firms, including JPMorgan and Morgan Stanley, have recently maintained 'overweight' ratings, indicating divergent views within the analyst community. The move may prompt short-term trading activity, particularly among quantitative funds tracking analyst sentiment. Investors in the SaaS and enterprise software sectors, including Salesforce (CRM), Adobe (ADBE), and Oracle (ORCL), could reassess their positioning in response to shifting dynamics in the business software landscape.