Bank of America Keeps Neutral Rating on Workday

Bank of America reiterated its neutral rating and $205 price target on Workday Inc., citing AI-driven growth expectations.

Updated on Nov. 9, 2026 in Job Search

Bank of America Keeps Neutral Rating on Workday

Bank of America reiterated its neutral rating and $205 price target on Workday Inc. The bank forecasts Workday's 12-month subscription backlog at $9.15 billion, below the 12% consensus growth estimate.

Why it matters

The forecast suggests Workday's subscription backlog growth may fall short of consensus expectations even as the company expands its AI strategy. Investors and enterprise software observers are weighing whether AI-driven revenue gains will offset slowing backlog momentum.

Bank of America forecasts subscription revenue growth of 12.6% in financial year 2027 and 11% in financial year 2028, against an expected 12% subscription revenue growth. Workday expects AI to generate roughly 70% of incremental annual recurring revenue from existing customers in financial year 2028.

The players

Bank of America

Bank of America is one of the largest U.S. banking and financial services companies, whose research division publishes equity ratings and price targets on publicly traded firms.

Workday Inc.

Workday Inc. is an enterprise software company that provides human capital management and financial management applications to large organizations.

The details

Bank of America's analysis points to Workday's expansion of its AI strategy through the Sana user interface, third-party vendor access via the Model Context Protocol, and the acquisition of C1.ai to add cybersecurity capabilities. The bank also modeled fourth-quarter subscription revenue growth of 10.4% and an operating margin of 31%, with a forecast operating margin of 30%.

November 9, 2026: Bank of America reiterated its neutral rating and $205 price target on Workday.
November 24, 2026: Workday releases its third-quarter financial year 2027 results.
Financial year 2028: Workday targets approximately 11% subscription revenue growth.

Market Landscape

A survey of more than 300 chief information officers found that 88% use AI to improve productivity and reduce costs, while human capital management ranked last among enterprise spending priorities at 16%. Workday's AI push positions the company within a competitive enterprise software market where AI capabilities increasingly shape buying decisions.

Shifts in Workday's AI strategy and subscription growth can affect the software tools employers use for payroll, HR, and financial management that employees interact with daily. Changes in enterprise software spending priorities may also influence which HR and finance roles companies choose to expand or consolidate.

The takeaway

Analyst forecasts like Bank of America's offer a useful gauge of whether a company's AI investments are converting into the recurring revenue investors expect. Watching backlog figures alongside margin guidance can clarify how much of a software firm's growth is driven by new AI products versus its established customer base.

What happens next

Workday releases its third-quarter financial year 2027 results on November 24, 2026, which will provide the next data point on subscription backlog performance against the Bank of America forecast.