Would Tesla Stock Rise 60% If Added to the S&P 500? Please, That’s a Stretch.
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Some, however, are skeptical what happened to Yahoo! will happen to Tesla.
Barron’s suggested—after talking with Baird managing director and trader
Greg Gaynor—that any gains from S&P inclusion are already reflected in Tesla’s share price. Gaynor agreed, basing his opinions, in part, on what his clients are doing, many of which are actively trading shares. Tesla stock, after all, is up 50% over the past month.
Still, not every analyst thinks
Barron’s is right.
Gary Black, a former tobacco-sector analyst for Bernstein in the 1990s and the former chief executive of Aegon Asset Management, told
Barron’s this past week he believes S&P inclusion isn’t fully baked into the share price. He said inclusion could push the stock up more than 10%.
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Analysts expect the company to report a loss of 58 cents for the second quarter. But estimates look very stale. Tesla beat Wall Street’s second quarter
delivery expectations and many analysts expect to see
positive profit, a criterion for S&P inclusion, in the quarter.
Analysts don’t update financial models every day so estimates
lag behind news when stocks move like Tesla.
If Telsa was to “pull a Yahoo,” the stock could hit
$2,200 and give the company a market value of more than
$400 billion. That math is fun with numbers, but bullish Tesla investors can hope.
