Tesla Inc. (NASDAQ: TSLA) will make up for 1.69% of the S&P 500 index as it makes its debut on Monday’s open, according to S&P Dow Jones Indices analyst Howard Silverblatt.
What Happened: Silverblatt said S&P 500’s price-earnings ratio for the coming year will increase from 22.3 to 22.6 with the electric vehicle maker’s addition, CNBC reported Sunday. For every $11.1 Tesla moves, the S&P 500 will fluctuate by one point, as per the analyst.
S&P 500’s dividend yield will dip from 1.56% to 1.53%, Silverblatt said in a note, as per CNBC.
Why It Matters: Tesla will become the fifth largest constituent of the S&P 500 on Monday with the 1.69% weighting.
See Also: Tesla’s Valuation Is Greater Than Nearly The Entire Established Auto Industry
Apple Inc. (NASDAQ: AAPL) leads the charts with 6.47%, according to Silverblatt. Other companies ahead of the Elon Musk-led automaker include Microsoft Corporation (NASDAQ: MSFT), Amazon.com Inc. (NASDAQ: AMZN), and Facebook Inc. (NASDAQ: FB).
Alphabet Inc.(NASDAQ: GOOGL) (NASDAQ: GOOG) Class A and Class C shares have 1.66% and 1.61% weighting, respectively.
Goldman Sachs analysts last week said Tesla’s addition to S&P 500 will not make the index more expensive, noting that the aggregate index P/E multiple of S&P 500 will be lifted by slightly less than 1.5% on the EV maker’s inclusion.
Tesla is replacing Apartment Investment and Management Co (NYSE: AIV) in the index.
Price Action: Tesla shares traded 5% lower at $658.99 in the pre-market session Monday.
See Also: What Traders Need To Know About The Historic S&P 500, Nasdaq 100 Rebalancing
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|Dec 2020||CFRA||Downgrades||Strong Buy||Hold|
|Dec 2020||New Street||Downgrades||Buy||Neutral|
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