Manufacturer of electric vehicles Tesla Motors, Inc. (NASDAQ: TSLA) will see its shares added to the S&P 500 index and this is a victory for Tesla’s bulls, according to Wedbush Securities.
Wedbush for “Final Straw”: Tesla investors were disappointed that the shares were not added to the S&P 500 index in September, analyst Daniel Ives said in a note.
Tesla’s earnings report, which signals a sustainable profitability trajectory, is the “last straw” that included stocks in the index, the analyst said.
“Clearly, this is a key positive for stock and indexing purposes and ultimately removes another question mark around Tesla̵
Related link: 48 shares move in the middle of the day on Tuesday
Bigger story than Tesla: Tesla’s inclusion in the S&P 500 index is inferior to the bigger story, news executive and author Joan Lipman told CNBC.
Tesla’s inclusion in the index is “confirmation” that electric vehicles represent the future of transport, she said.
Global S&P response: The owner of the S&P 500 index, S&P Global, Inc. (NYSE: SPGI) is “confused” and may not know how to handle the inclusion of Tesla, said Jim Kramer of CNBC.
Tesla is among the most valuable companies ever to enter the index, with a market capitalization in the range of $ 400 billion.
This creates a set of challenges for the index operator, which can add Tesla in two tranches. It is still unclear which company Tesla will replace in the index.
“They can’t knock out the little ones [company]”It doesn’t do anything,” Kramer said. “When they balance that, they almost seem to have to do less.”
TSLA price action: Shares of Tesla ended the session on Tuesday with 8.21% to 441.61 dollars.
Photo courtesy of Tesla.
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