Bull Notes Push Workday Stock to Pre-Earnings Record

Workday reports third-quarter earnings after the close on Thursday, Nov. 18

Digital Content Manager
Nov 16, 2021 at 10:41 AM
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The shares of Workday Inc (NASDAQ:WDAY) are up 1.8% to trade at $300.97 at last check, after earlier surging to a record high of $303.33. The software concern received an upgrade from UBS to "buy" from "neutral," as well as a price-target hike to $370 from $255, with the firm noting higher spending on human resources systems. Mizuho raised its price objective as well to $340 from $290, while Credit Suisse initiated coverage of WDAY with an "outperform" rating, and a $310 price target.

These bull notes precede the company's third-quarter earnings call, due out after the close on Thursday, Nov. 18. The equity has a mixed history of post-earnings reactions, finishing four of eight next-day sessions higher over the past two years, while four were lower. Options traders are pricing in an 8.8% swing for WDAY this time, which is higher than the 6.2% move it averaged after its last eight reports, regardless of direction.

What's even more notable is that analysts were already optimistic towards Workday stock coming into today. Of the 27 in coverage, 24 rated it a "buy" or better, while only three said "hold" or worse. Plus, the 12-month consensus target price of $321.84 is a 7.9% premium to current levels.

Workday stock has been tearing up the charts since bouncing off the $248 level back in October, overcoming a long-term ceiling at the $280 mark. Today's pop is helping pad WDAY's 32.5% year-over-year lead.

A closer look at today's options activity reveals 1,729 calls and 887 puts have exchanged hands so far, which is triple the intraday average. Most popular is the November 315 call, followed by the 330 call in the same monthly series, with new positions being bought to open at the first. This indicates options traders expect additional upside for the security by the time these contracts expire on Friday.

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