德意志银行将Workday评级从买入下调至持有，目标价上调至220美元

Hold United States WDAY.OQ Software More balanced risk/reward, moving tosidelines Research Analyst+1-212-250-8563 We are downgrading Workday to Hold from Buy while raising our price target tos220, reflecting a more balanced risk/reward profile following the stock'ssubstantial re-rating over the last several months. Workday shares haveroughly4%averagedeclineacross ServiceNow,Salesforce,Autodesk,Adobe,andIntuit over the same period, materially narrowing what we previously viewed as adisconnect between the quality of the business and valuation. More recently,shares moved higher following reports of a potential take-private transactioninvolving SilverLake,resulting inavaluationthatbetterreflectsboththequalityof the underlying business and the probability of a strategic outcome. Research Analyst+1-212-250-6775 ResearchAssociate+1-212-250-9075 Chris FountainResearch Associate+1-212-250-1575 Importantly,our rating change is not driven by a deterioration in fundamentalsWe continue to view Workday as one of the highest-quality franchises inenterprise software,supported by its mission-critical position across HumanCapital Management and Financial Management, durable customer relationships,high switching costs,and substantial recurring revenue.We continue to hearaboutbuoyed employeeand customermoralefollowingthereturnof AneelBhusri to the CEO role, and our long-term confidence in the company's strategicpositioning remains unchanged. Rather, this is a valuation call. At the same time,we believe investors will continue to grapple with questions around the durabilityofgrowthand long-term impactof Alon enterpriseapplications.WhileWorkdayappears well-positioned tobenefitfromthesetrends,adoption of Al productsand agents remains in the early innings, and we expect investors will want to seeclearer evidence of sustainable net revenue contribution before assigningmeaningfullyhigherstandalonevaluationmultiples. Key changes RatingBuypIoHPrice target (USD)18022022%Source: Deutsche Bank Onthereports of apotentialtake-private,giventhedownwardreset insoftwareterminal multiples over the last several years, we believe historical software M&Aprecedentsprovide onlylimited guidancefor evaluating apotential transaction.Instead,weframepotential outcomesthrougharangeofacquisitionpremiumsand transaction scenarios, which suggest that current trading levels alreadyreflect a meaningful probability of an acquisition, with Friday's closing priceimplyinga27%and40%premiumtothe1-and2-monthunaffectedVWAPs,respectively.Wealso arehard-pressed to see meaningful upside to ourupdateds220 target price using reasonable assumptions around more forceful valuecapture and operating margins in an LBO scenario, given what is likely a longer risk/reward. toF1Q,evenwithmixedfeedbackontheirperformanceinthequarter.Asaresult.weexpectF2QresultsforSubscriptionrevenue,12-monthsubscriptionbacklogand non-GAAP operating margin will all likely come in at the high end or aboveguidance.Looking to F3Q,we see risk that guidance for 12-month subscriptionSpecifically,webelieve guidance could beset withamidpoint closerto12%y/yvs.Street13.6%asthecompanyanniversariestheParadoxandFlowiseacquisitions, which we believe may not be appropriately reflected in consensusmodels.ForFY27,webelieve the company could modestly raise its Subscriptionrevenue target from the current implied 12-13% to approximately13%y/y.Wealsoexpectthecompanylikelyreiterates its30.5%non-GAAPoperatingmargintarget, though were the company to more meaningfully outperform ourexpectations for2Q non-GAAP operating margins,wenote the possibility ofamodestupwardrevisiontoguidancehere,too. LBOEquityPaybackPeriodIn thinking about what a potential takeout price could be, we contemplate different scenarios to try and understand what an equity payback period or IRRcould look like in a LBO.We experimented across assumptions onup-anddown-market portions of Workday's business, including price,churn,and new businessto tryand understand impacts ofdifferentdecisions on revenuegrowth.We thenflowed those assumptions through the income statement and built inassumptions around impacts togross margins (i.e.frompriceas aprimary driverof growth) and operating expenses.Across the scenarios we envisioned, wegenerally converged on $5bn in unlevered free cash flow. Weshowtheapproximatepaybackperiod inyearsunderdifferentdebtandshareprice scenarios assuming an 8.5% interest rateon debt and a17%tax rateandassuming s5bn is sustainable and doesn't grow/decline inFigure 1below.Forasmuch as we appreciatethe strength of Workday's business,an acquirer will likelywant to realize areturn ina reasonabletimeframe.As the deal sizegetslarger,thepayback duration increases as well, likely limiting IRR.Additionally,thelarger thedeal size becomes,the more challengingthelogisticsbecome,as exemplified bySilver Lake pulling together a club or consortium of investors for the ElectronicArts deal. PotentialTransactionscenariosGiven the implied deterior