Benzinga | Oct 20, 2020 11:39AM EDT

Piper Sandler Upgrades Workday 'Ahead Of Promising 2021 Recovery'

Workday Inc's (NASDAQ:WDAY) subscription growth is likely to bottom in the second half of 2020 and reaccelerate in 2021, according to Piper Sandler.

The Workday Analyst: Brent Bracelin upgraded Workday from Neutral to Overweight and raised the price target from $248 to $275.

The Workday Takeaways: Workday has several catalysts to trigger the company's subscription growth, Bracelin said in a Tuesday upgrade note.

"Upside levers include remote work tailwinds within the core HCM segment and a handful of potential FINS catalysts as it crosses over $1B+ revenue run-rate next year coupled with back-office automation that could open up an entirely new B2B payment revenue opportunity similar to Coupa Pay," the analyst said.

He recommends buying the stock "ahead of a promising 2021 recovery," while adding that Workday's performance in 2022 could be even stronger if Gartner's forecasted spike in cloud ERP contracts materializes.

Gartner projected the spend to reach "$33B by 2024 on accelerating growth starting in 2022 from $18B in 2020," Bracelin said.

WDAY Price Action: Shares of Workday were down 0.2% at $227.18.

Photo courtesy of Workday.