With Amazon’s Stock Split Done, Are These Stocks Next?

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CMG: Chipotle Mexican Grill logo
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Chipotle Mexican Grill

Amazon’s (NASDAQ:AMZN) first stock split in almost two decades took effect on Monday,  dividing each equity share into 20 shares. The stock gained roughly 2% in Monday’s trading following the split. Google’s parent company Alphabet (NASDAQ:GOOG) has also announced a 20-for-1 stock split, which is set to take effect in mid-July. Now although splits don’t change the fundamentals of a company, they typically cause a run-up in the stock price post-announcement as investors see them as a signal that management is confident that growth will remain strong going forward. Although the markets have increasingly turned bearish in recent months with the S&P 500 down by almost 14% year-to-date, reducing the incentive for companies to carry out splits in the near term, we have identified a list of high-profile stocks that could be poised for a split eventually in our theme of Stocks Poised For A Split . The theme includes companies with a strong track record of revenue growth, with their stocks also trading at high prices, potentially making them candidates for a stock split.  Below is a bit more about some of these companies.

Tesla carried out its last split in August 2020 and its stock roughly doubled since then trading at levels of around $720 currently.  Although Tesla stock has been a laggard of sorts in 2021, declining by 40% year-to-date, the company has indicated that another split was likely, with this likely to be put to a vote in the company’s meeting of stockholders which is to be held in early August.

Regeneron Pharmaceuticals stock has never seen a split in its history. That said, the company’s relatively high stock price of over $600, and its strong recent performance could make it a candidate for a split going forward. Regeneron stock remains down by about 3% year-to-date.

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LAM Research, a company that supplies wafer fabrication equipment and related services to the semiconductor industry saw its last stock split in 2020. The stock has underperformed the broader markets considerably this year, declining by about 28%. However, the company’s recent financial performance has been solid, with revenue rising by over 40% last year.

Chipotle Mexican Grill stock trades at over $1,300 presently and the company hasn’t carried out any splits to date. While the stock has declined a bit this year, the company’s financial performance has been solid, with the company growing sales by about 16% year-over-year in Q1 to $2.02 billion. This could give the management an incentive to eventually carry out a split.

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Returns Jun 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
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[1] Month-to-date and year-to-date as of 6/7/2022
[2] Cumulative total returns since the end of 2016

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