It is one of the biggest stock splits in recent memory. Shares of restaurant chain operator Chipotle (NYSE:CMG) are set to trade on a split-adjusted basis from tomorrow as the company’s 50-for-1 stock split goes into effect.
Chipotle’s Mega Stock Split
Chipotle announced the 50-for-1 stock split earlier this year, its first in about three decades. The move is aimed at making the company’s shares more accessible for its employees as well as retail investors. Chipotle’s share price has surged by nearly 336% over the past three years on the back of its robust financial performance.
The record date for the split was set for June 18. Now, holders of CMG stock as of the record date will receive 49 additional shares for each CMG share held by them after the market closes today. The stock is trading at roughly $3,240 today and could open at around $65 tomorrow.
Notably, a lower price makes a stock more affordable for retail investors. NVIDIA’s (NASDAQ:NVDA) recent 10-for-1 stock split is a case in point. At the same time, Chipotle shares aren’t exactly cheap at current valuations. The stock is currently trading at a price-to-earnings multiple of 68.5.
Is CMG Stock a Buy, Sell, or Hold?
Wall Street too is cautiously optimistic about Chipotle with a Moderate Buy consensus rating. Out of the 27 analysts tracking Chipotle at present, 19 have assigned the stock a Buy rating, and eight have opted for a Hold. In Sync, the TipRanks Technical Analysis tool is flashing a Neutral signal on Chipotle stock on a daily timeframe.
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