Benzinga | Nov 16, 2021 03:41PM EST

UBS Upgrades Workday On Back-Office Recovery

Workday Inc's (NASDAQ:WDAY) prospects have improved, with customers and partners projecting stronger-than-expected spending and practice growth and indicating a greater focus on their Human Resource systems due to labor constraints, according to UBS.

The Workday Analyst: Karl Keirstead upgraded Workday from Neutral to Buy, while raising the price target from $255 to $370.

The Workday Thesis: Conversations with six enterprises and partners highlighted an uptick in the tone around back-office spending intentions relative to the past nine to 12 months, Keirstead said in the note.

"The tone from our checks sounded better about mid-market HCM/Fins momentum, although most of our large enterprise checks were planning to increase their spend with Workday," he wrote.

The improvement in the spending landscape "is too recent" for this to be "fully baked" into Workday's stock, despite the 20% appreciation after the company reported its second-quarter results, the analyst further mentioned.

WDAY Price Action: Shares of Workday had risen by 1.4% to $299.90 at the time of publication Tuesday.