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Teladoc Upgraded at Credit Suisse on Deal With Livongo

Teladoc’s $18.5 billion deal for Livongo "creates a digital health giant," wrote Credit Suisse analyst Jailendra Singh, who upgraded Teladoc.
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Teladoc Health  (TDOC) - Get Free Report shares rose on Monday after Credit Suisse analyst Jailendra Singh upgraded the telehealth service to outperform from neutral, raising his share-price target to $249 from $225.

Teladoc’s $18.5 billion deal to buy Livongo Health  (LVGO) - Get Free Report, a provider of digital health monitoring tools for patients with chronic diseases, “creates a digital health giant,” Singh wrote in a commentary. The deal was unveiled this month.

Teladoc shares recently traded at $203.36, up 8.5%. The stock has well more than doubled year to date.

Livongo recently traded at $128.49, up 8.6%. The stock has quintupled this year.

The combined company’s growth and synergy targets seem “very achievable,” Singh said, according to Bloomberg.

For 2025, he forecast sales of $5 billion for the combined company, with earnings before interest, taxes, depreciation and amortization of $1.1 billion.

The combined company should be far out in front of the rest of the industry when it comes to virtual care and chronic care management, Singh said, according to the Fly.

He likes Livongo's business model, offerings, and growth prospects, according to the Fly.

Morningstar analyst Soo Romanoff on Monday voiced mixed views about Teladoc.

“Teladoc Health’s $18.5 billion definitive agreement to acquire Livongo shares for a 58% stake in the combined entity, if approved by regulatory bodies, would establish the largest virtual health company and rival the largest healthcare IT companies under coverage by market cap,” she wrote in a commentary.”

“Although we view the merger to be strategically complimentary, the significant premium and accumulating operating losses give us pause. We maintain our no-moat rating and $153 fair value estimate.”