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Tesla To Account For 1.69% Of S&P 500 In Its Debut Today, Analyst Says

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Tesla To Account For 1.69% Of S&P 500 In Its Debut Today, Analyst Says

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

Click here to check out Benzinga's EV Hub for the latest electric vehicles news.

Latest Ratings for TSLA

DateFirmActionFromTo
Feb 2021Morgan StanleyMaintainsOverweight
Feb 2021Piper SandlerMaintainsOverweight
Jan 2021Deutsche BankMaintainsBuy

View More Analyst Ratings for TSLA
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