3 ASX 200 shares I would buy in February

Here's 3 quality ASX 200 shares to watch this month as market conditions shift.

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As February arrives, the Australian share market is entering a more selective phase.

Inflation concerns, shifting interest rate expectations, and money moving between sectors are shaping investor behaviour. Some areas of the market have pulled back sharply, while others are quietly strengthening under the surface.

In this environment, I am looking for quality businesses with strong balance sheets, clear earnings drivers, and broker support.

Here are 3 ASX 200 shares that stand out to me right now.

Xero Ltd (ASX: XRO)

After a strong run through much of 2025, Xero shares have pulled back over recent weeks. That weakness has come as global tech stocks softened and investors rotated toward more defensive sectors.

Xero remains one of the highest quality software businesses on the ASX. It continues to grow subscriber numbers across key offshore markets, while improving margins as scale builds.

Brokers remain supportive. Several major investment banks have reiterated 'buy' ratings in recent months, pointing to Xero's strong competitive position and long runway for earnings growth.

While short term volatility may persist, I see this as a high-quality growth name trading at more attractive levels than earlier in the year.

Woodside Energy Group Ltd (ASX: WDS)

The energy giant provides exposure to oil and LNG markets, alongside a fully franked dividend stream that many growth stocks simply cannot match.

Energy prices have firmed in recent months, supported by global supply discipline and ongoing geopolitical uncertainty. That backdrop has helped support Woodside's cash flows and balance sheet.

Broker sentiment here is more balanced than bullish, but most analysts still see value. Several brokers have price targets modestly above current levels and continue to highlight Woodside's dividend yield as a key attraction.

Northern Star Resources Ltd (ASX: NST)

Gold stocks have been quietly regaining attention, and Northern Star sits at the top of that list.

The miner benefits from strong production assets, improving margins, and rising gold prices. With global uncertainty lingering, gold has once again started to attract safe haven demand.

Northern Star has also executed well operationally, which has helped support broker confidence. Analysts generally view it as one of the better run gold producers on the ASX, with solid free cash flow generation.

If gold prices remain elevated, Northern Star could continue to outperform the broader S&P/ASX 200 Index (ASX: XJO).

Foolish takeaway

Markets rarely move in straight lines, especially around reporting season and shifting macro expectations.

These 3 ASX 200 shares give investors a mix of growth potential, income support, and exposure to gold.

For investors willing to look beyond short-term noise, February could offer some attractive entry points.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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