BofA Securities analyst Allen Lutz raised the price target on Teladoc (NYSE: TDOC) to $9.00 (from $8.25) while maintaining a Buy rating.

THe analyst comments "We upgraded shares of TDOC last quarter on the belief that the move to insurance coverage for BetterHelp would drive firmer margins and a multiple re-rating (see our upgrade note). BetterHelp EBITDA missed expectations in the quarter which, in our view, is exactly what investors should want to see because it means the transition to insurance is happening more quickly. Initially, BetterHelp margins should weaken as lower gross profit from insured lives more than offsets any savings from lower marketing spend. This is what happened during the initial quarters during Talkspace’s transition from DTC to insurance coverage before EBITDA margins expanded to > 10%. We continue to view shares of TDOC as significantly undervalued and raise our price objective from $8.25 to $9.00, now based on 6.0x CY26E EBITDA (5.5x prior). With TDOC shares trading at less than 4x CY26 EBITDA and a nearly 20% FCF yield, we see an asymmetric risk/reward at current levels."