By Shares of Workday and Lowe’s have gained in recent sessions on the back of their strong financial updates, but a market veteran sees significant further upside in both.
Matt Maley – the chief market strategist at Miller Tabak shared his bullish view on WDAY and LOW in an interview with CNBC this week.
Here’s why he expects Workday and Lowe’s shares to extend their gains in 2025.
Workday Inc (NASDAQ: WDAY)
Maley is positive on Workday stock primarily because it’s committed to growing its international sales. Domestic sales currently make up about 75% of the company’s overall revenue.
But if it succeeds in expanding its footprint internationally, “that’ll be very bullish, especially because the stock is kind of fairly in the middle of its five-year range” in terms of P/E multiple, he said recently on “Power Lunch”.
The equity strategist did find signs of weakness in subscriber growth a bit concerning in WDAY’s latest reported quarter.
But a boost to its profit margins brought him adequate confidence in keeping bullish.
Matt Maley’s constructive view on Workday stock is shared by analysts at BMO Capital as well.
Following its earnings release, the investment firm raised its price target on WDAY to $314.
BMO’s revised price target translates to about a 17% upside from current levels. Its analysts are positive on Workday shares as the company is leveraging artificial intelligence to drive growth and efficiency.
Workday has some $8 billion in cash, cash equivalents, and marketable securities that supports its ability to invest in AI initiatives.
WDAY, however, remains unattractive for income investors as it’s not currently a dividend stock.
Lowe’s Companies Inc (NYSE: LOW)
Lowe’s reported upbeat financials for its fourth quarter this week but Maley expects the recent housing data to result in a muted near-term for the home improvement stock.
The Miller Tabak strategist, however, remains bullish on LOW for the longer term.
“The data does make me concerned, but longer term, I do like the stock. You may not necessarily want to chase it on this bounce, but it’s to buy over time,” he said in the CNBC interview.
Matt Maley also expects rebuilding following LA wildfires to prove to be a meaningful tailwind for Lowe’s stock.
Additionally, higher mortgage rates will continue to make homeowners favour improving their current residence instead of trading up or downsizing.
That may benefit LOW shares as well, he added.
In its recently concluded quarter, Lowe’s reported positive comparable sales for the first time since 2022.
Still, shares of the home improvement retailer are roughly flat for the year.
Also on Wednesday, Piper Sandler analysts trimmed their price target on Lowe’s shares to $296. But that still indicates potential for about a 20% upside from current levels.
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