UPDATE: Bank of America Downgrades eHealth to Underperform on Valuation

Bank of America reduced its rating on eHealth

from Buy to Underperform while raising its price target from $26 to $28. Bank of America said, "Although we believe eHealth has positioned itself for a strong 2013, our optimism is tempered by the stock's rich valuation. eHealth, a below peer top and bottom line grower, is trading at 25x 2013E P/PCF which is a steep premium to eCommerce peers at 20x. We are moving our valuation basis to 2014 and raising our price objective to $28 (from $26) based on 17x our 2014 P/FCF estimate plus $6/cash per share." eHealth closed at $27.24 on Thursday.