Some Wall Street analysts have said the stocks could join the S&P 500 when it undergoes its quarterly rebalancing next month. In addition to being respected, there are some significant benefits to being included in the index, with Barclays analyst Ramsey El-Assal noting that newly added companies gained an average of 7.7% on their first trading day. Super Micro Computer and Deckers Outdoor are the latest companies to join the index, replacing Whirlpool and Zions Bancorporation, respectively, in March. According to the company, Bullock is one of the contenders expected to secure a spot on the coveted index. The payments company qualified after reporting positive net profits in the fourth quarter of 2023. ”. “We estimate that financial services is the second most undervalued industry category in the S&P 500 currently (software and services are the most undervalued),” he wrote. “We believe this underrepresentation makes SQ, which has a market capitalization of $45B, emerges as a possible candidate for inclusion,” he said, adding that potential mergers and acquisitions of existing members of the index could also create opportunities for the stock. SQ Mountain shares have fallen about 8% so far this year, and as of Wednesday’s close, the company’s $100 price target implies an upside of nearly 40%. Barclays maintained an overweight rating on the stock. Keefe Bruyette & Woods also believes financial services stocks may be added to the S&P 500, citing the industry’s underweight status. Analyst Shreyank Gandhi identified Square and Coinbase as potential “wildcard” entries because they recently qualified, citing the index’s preference for newly qualified names. Most importantly, Gandhi believes Dell is the most likely company to join given its size. Other candidates, but unlikely to be added, include KKR and Apollo Global Management. Yili has a “medium to high probability” of re-entering the S&P 500. Gandhi thinks Ryan Specialty Holdings is likely to join the S&P Midcap 400, while New York Community Bancorp may fall to the S&P SmallCap 600. Axis Capital Holdings and BOK Financial may join the index, he added. The realignment is expected to take effect after the market close on June 21.
