February’s Top 3 Stock Upgrades: What Investors Need to Know

Key Points

• Lululemon is among the most upgraded stocks tracked by MarketBeat and is on track to rise by 25% or more by the year's end. 
• DoorDash is another stock with a 25% upside, supported by business quality and analysts' sentiment trends.
• Ulta Beauty pulled back into a beautiful opportunity; analysts are lifting price targets and upgrading this stock. 

At the end of February, Lululemon NASDAQ: LULU, DoorDash NASDAQ: DASH, and Ulta Beauty NASDAQ: ULTA were among the Most Upgraded Stocks tracked by MarketBeat. Investors should pay attention to this because the sentiment trends drive these markets and lead them to fresh highs likely set early this year. The critical takeaway is that these quality consumer-focused businesses are growing, have momentum at the start of the calendar year, and their share prices are on track to rise by 25% or more before the year’s end. 

Lululemon Regains Traction With New Products In Focus

Lululemon’s share price lost traction in 2024 due to fears of lost relevancy in a world of increased competition and consumer thrift.

However, the rebound began mid-year and is still in play, supported by a solid outlook for growth, earnings, and analysts' sentiment. Lululemon received 31 positive revisions from 29 analysts tracked by MarketBeat since early December, including more than one from several of the group and 12 since the first of 2025. The group shows a high conviction in the Moderate Buy rating, with 70% rating the stock a Buy and no Sells.

Regarding Lululemon’s stock price outlook, the consensus target reported by MarketBeat near the end of February is $400, an 11% upside from critical support levels, with revisions leading to the high-end range. The high-end range puts this market near $500, another 25% higher. The catalyst for the move could be the Q4 earnings release, which is due in late March. 

The analysts forecast an industry-leading 12% revenue growth for the holiday quarter, which may be underestimated due to strengths shown in Q3 and revealed during the ICR Conference.

The company revealed strength in all categories and geographies, calling out second layers, outerwear, and bags specifically. The strength in non-core categories is significant, providing business diversification and deepening consumer penetration to help sustain growth.

DoorDash Could Deliver a New All-Time High This Year 

DoorDash’s stock price has been dashing higher since it bottomed in late 2022. The rally is driven by sustained mid-20% growth, routine outperformance relative to estimates, and analysts' sentiment. The analyst's sentiment trends include increasing coverage and a rising consensus price target with no end to the trend in sight.

The Q42024 results aligned with the trends, spurring 21 revisions in February alone. 

The February revisions include 20 boosted price targets; only one was reiterated, which is still above the consensus. The fresh targets suggest another 25% upside for this market, sufficient to put it near the current all-time high.

The revision trend will likely continue lifting the consensus and high-end range as the year progresses. The company is forecast to grow revenue by at least 20% this year and significantly widen its margin. 

Ulta Beauty Pulls Back Into a Beauty of a Buying Opportunity

Ulta Beauty’s stock price pulled back following the Q3 earnings report, opening a beauty of a buying opportunity. The stock price is discounted nearly 20% from its 2024 highs and set up to rebound in 2025.

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The rebound will be driven by sustained growth, healthy cash flow, and analysts' sentiment. The analyst sentiment trend contradicts the stock’s price decline, including numerous price target increases, upgrades, and no negative activity since the Q3 release. The forecast for Q4 is for revenue and earnings to contract compared to the previous year, a low bar likely beaten by a solid margin. 

Share buybacks are a factor in Ulta’s stock price outlook. The company is aggressively buying shares, reducing the count by 4.2% YOY on average for FQ3 and the YTD periods.

Buybacks are expected to continue aggressively because of the authorization and the balance sheet. At the end of Q3, the balance sheet highlights include increased cash, assets, and equity compared to the prior year. Equity, a measure of shareholder value, increased by 15%.