Alphabet Inc. (NASDAQ: GOOGL) is the headline story across the markets on Wednesday, as the company is planning to conduct a 20-for-1 stock split. Shares hit an all-time high in response, as investors are cramming into the stock to get a piece of the action. While Alphabet is obviously benefiting big from this split, there are a few other companies out there with high share prices that could see a sizable benefit from this move as well.
Note that stock splits do not technically affect the value of a company. In the process of splitting a stock, the market cap for the company remains the same, but it is distributed over more shares that are created from the split. The new price per share reflects the same market cap, although the price is lower.
Moves like this generally send share prices up in the interim because investors are capable of building a larger position (more shares) in a stock prior to the split. Also with lower ostensible prices, retail investors who might not be able to afford Alphabet at $3,000 would be more incentivized to buy in after it splits to something in the area of $150.
Here are a few more companies with big prices that could stand to split their stock.
After Amazon.com Inc. (NASDAQ: AMZN) came public in May 1997, it split its stock three times over the next two years. Since then, Bezos has been stalwart in his position to not split the stock. However, with Bezos no longer the CEO of Amazon (though still board chair), there could be an opportunity here for new management to take a different approach.
Amazon stock last closed at $3,023.87, in a 52-week range of $2,707.04 to $3,773.08. The company has a market cap of $1.54 trillion, and the analysts’ consensus price target is $4,095.17.
Though AutoZone Inc. (NYSE: AZO) has been a public company since 1991, it has split its stock just twice, and both times were in the early 1990s. The auto parts retailer did a two-for-one split in 1992 and then again in 1994. It has been over a quarter of a century since the stock has been split, maybe it is due for one. Considering recent moves in the stock, management should keep this option on the table, as AutoZone was only a $700 stock five years ago, nearly tripling to where it is now.
Shares of AutoZone most recently closed at $2,033.67 and have a 52-week range of $1,139.18 to $2,110.00. The consensus price target is $2,183.94. The market cap is $41.96 billion.
Chipotle Mexican Grill
Chipotle Mexican Grill Inc. (NYSE: CMG) originally came public back in 2006, and it is the one company on this list that has never split its stock. Although this stock has had its ups and downs due to health scares, it has demonstrated a consistent growth over the past five years. In that time alone, the stock has more than tripled. Chipotle generally positions itself as a company that cares about the environment and its consumers. It could take further steps to care about its retail investors and see some solid gains in the process.
Chipotle stock last closed at $1,512.45, in a 52-week range of $1,256.27 to $1,958.55. The market cap is $41.9 billion, and the consensus price target is $1,970.96.
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