Teladoc Stock Extends Rebound on Merger-Driven Upgrade

Teladoc stock has more than doubled in 2020

Deputy Editor
Aug 18, 2020 at 9:40 AM
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Last night, Teladoc Health Inc (NYSE:TDOC) received an upgrade from Credit Suisse to "outperform" from "neutral." The firm cited Teladoc's merger with Livongo Health (LVGO), a "digital health giant" likely to be ahead of the competition, and added in a price-target hike to $249 from $225. This morning, TDOC is still rallying off this bull note, up 3.2% at $211.49 at last check, likely due to an unconfirmed upgrade from Verity Research to "buy" from "hold."

With today's extended gains, Teladoc stock is facing off with overhead pressure at the 20-day moving average. TDOC nabbed a record high of $253 on Aug. 4, and has more than doubled in 2020. Plus, the shares' 10% monthly deficit so far has been contained by its 100-day moving average.

Credit Suisse upgrade is in concert with the overall brokerage sentiment, with 14 out of 24 at a "buy" or better rating, and not a single "sell" in sight. Plus, the 12-month consensus target price of $227.16 is a 10.8% premium to last night's close. 

In the options pits, calls have more than doubled puts in the last 10 weeks. This is per TDOC's 50-day call/put volume ratio of 2.39 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 62% of all readings from the past year, meaning options traders are slightly more call-heavy than usual.

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) sits in the 8th percentile of its annual range, suggesting a heavy call bias. In other words, there's a lot of options-related pessimism that could unwind and push the stock higher.

 

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