Large companies have a growing appetite for buying enterprise resource planning, or ERP, software via cloud computing platforms, which sets up Workday ( WDAY ) for a "breakout" year, says an analyst who upgraded the stock.
[ibd-display-video id=3062895 width=50 float=left autostart=true] Brent Bracelin, a KeyBanc Capital Markets analyst, on Thursday upgraded Workday to overweight with a price target of 131.
"We see 2018 as a breakout year for Workday as shares could eclipse the 2014 highs driven by inflecting enterprise interest in cloud ERP," said Bracelin in a report.
Workday shares climbed 2.8% in premarket trades on the stock market today . Workday soared 54% in 2017, though the stock slipped from a high of 116.62 set on Nov. 24.
Pleasanton, Calif.-based Workday sells cloud-based software for human relations, payroll and other business functions. Workday has expanded from human capital management software into financial management software.
"2018 has the makings of a breakout year, in our view, where any incremental proof-points that Workday can become a legitimate cloud platform for core financial ERP workloads could create an environment where the shares could benefit from both margin and multiple expansion," added Bracelin.