TLDR
- DoorDash stock upgraded to Buy from Hold at Jefferies with price target raised to $260 from $220, implying 23% upside
- Shares fell 17% after Q3 earnings on November 5 due to investor concerns over planned increased investments in 2026
- Analyst John Colantuoni says the guidance helped lower expectations and provides flexibility for long-term investments
- Stock down 3.6% on Wednesday despite upgrade, has dropped 13% since earnings but still up 22% year-to-date
- Wedbush also upgraded DoorDash to Outperform on November 13 with $260 price target, citing justified investments
DoorDash shares received another vote of confidence on Wednesday as analysts see opportunity in the stock’s recent weakness. The food delivery platform has dropped double digits since reporting quarterly results earlier this month.
Jefferies analyst John Colantuoni raised his rating on DoorDash to Buy from Hold. He also increased his price target to $260 from $220, representing potential upside of 23% from the previous close of $212.08.
The upgrade follows a sharp 17% decline in DoorDash shares after third-quarter earnings on November 5. Investors reacted negatively to management’s announcement of increased spending plans for 2026.
The company plans to invest “several hundred million dollars” more in new initiatives and platform development next year compared to 2025. This investment ramp will result in what management described as “slight” margin expansion at the legacy business.
Colantuoni noted this represents a moderation from what investors had previously expected. However, he views the revised outlook as a positive development.
Investment Runway Remains Strong
The analyst believes the 2026 guidance actually provides the company with more flexibility. Lower expectations give DoorDash room to deliver both long-term investments and potential upside to consensus estimates.
Colantuoni pointed to accelerating growth trends as another reason for his bullish stance. U.S. restaurant delivery has grown faster over the past four quarters.
This trend makes him more optimistic about the runway for DoorDash’s most profitable business segment. He wrote that the company’s execution and growth algorithm now appear underappreciated by the market.
Shares traded down 3.6% on Wednesday despite the rating upgrade. The stock has gained 22% year-to-date but remains 13% below its pre-earnings level.
Second Upgrade in One Week
Jefferies isn’t alone in seeing value after the post-earnings selloff. Wedbush analyst Scott Devitt upgraded DoorDash to Outperform from Neutral on November 13.
Devitt maintained his $260 price target on the stock. He wrote in a research note that DoorDash’s increased investments are justified.
The spending will expand the company’s addressable market according to Devitt. The investments will also strengthen DoorDash’s product offerings on a global scale.
Both analysts appear to view the market’s reaction to higher 2026 spending as overdone. The sell-off has created what they see as an attractive entry point for investors.
Colantuoni’s higher price target suggests he expects the market to eventually reward DoorDash’s growth investments. His Buy rating indicates he believes the current valuation offers a favorable risk-reward profile.
The dual upgrades from major Wall Street firms come as DoorDash continues expanding beyond its core restaurant delivery business. The company has been investing in grocery delivery and other categories.
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