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S&P 500 adds three companies not named Tesla — ‘a bit of a shocker,’ analyst says

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Three new names will be added to the S&P 500 index this month, but none of them are Tesla Inc.

S&P Dow Jones Indices announced Friday afternoon that it will add three companies to the S&P 500
SPX,
-0.81%

— Catalent Inc.
CTLT,
-2.83%

, Etsy Inc.
ETSY,
-3.58%

and Teradyne Inc.
TER,
-4.06%

Tesla Inc.
TSLA,
+2.78%

was thought to be in line for the addition after announcing a fourth consecutive quarter of profitability, a requirement of the index, which many observers cited as a reason for a gigantic increase in the electric-car company’s stock in recent weeks.

“S&P 500 inclusion now likely a done deal,” Wedbush analyst Dan Ives said after Tesla reported a profitable quarter in July.

When reached Friday, Ives said “The Champagne was on ice to get into the S&P 500, [it] was baked into shares.”

“This was a bit of a shocker and the Street assumed this was a foregone conclusion,” Ives said in an email to MarketWatch. “Tesla not getting into the S&P 500 club is a head scratcher and the stock will likely be down for the indexing implications.”

Ives reiterated his neutral rating on Tesla shares in a note later Friday. Only 22% of sell-side analysts tracked by FactSet consider Tesla a “buy” as of Friday afternoon, which was actually an increase from earlier in the week, but still well lower than other stocks in the S&P 500 index.

Tesla stock has added more than 31% since announcing second-quarter earnings on the afternoon of July 22, though that performance has declined this week — at the end of Monday’s trading session, the stock had gained 56% since earnings. Shares have suffered this week in the wake of a stock split, the announcement of a plan to sell up to $5 billion in fresh shares, and insider selling. Overall, the electric-car company’s shares have still quintupled this year, pushing its market capitalization to $380 billion as of Friday’s closing bell.

Three previous members of the S&P Midcap 400 will move up to the larger index instead, replacing three other companies that moved down to the midcap index, H&R Block Inc.
HRB,
+0.73%

, Coty Inc.
COTY,
+6.31%

and Kohl’s Corp.
KSS,
+2.44%

The changes will take effect before the open of trading on Sept. 21.

Tesla stock fell more than 6% in after-hours trading following the announcement. Catalent shares rose nearly 3%, Etsy shares added more than 5%, and Teradyne stock increased more than 2%.

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