Not long after Nvidia did its 10-for-1 stock split, Chipotle Mexican Grill (CMG) said, “Hold my beer.” This massive stock split by the popular eatery, approved by its shareholders on Thursday, will be one of the largest in the history of the NYSE. Its purpose is to enhance the liquidity and accessibility of Chipotle’s shares by drastically reducing the price point while maintaining the company’s market capitalization. After the split, shares will start trading on a split-adjusted basis on June 26. Chipotle stock leads the Retail-Restaurants group, one of the top-performing industries in 2024 thus far.
Why 50 To 1?
The company sees this jaw-dropping stock split as an opportunity to make the stock more attractive to a wider range of investors and accessible to Chipotle employees. For current investors, this move increases the stock’s liquidity. The current $3,143.22 price tag puts the stock well out of reach of many retail investors. The 50-for-1 split also shows how well the company is doing—gangbusters, in fact. Chipotle is scheduled to report its second-quarter earnings on July 24th, with analysts forecasting a 23% year-over-year increase in earnings per share to $15.61 and a 16% surge in revenue to $2.93 billion. The company had previously raised its guidance for 2024 comparable restaurant sales growth to the mid-to-high single-digit range, citing robust demand.
What The Industry Thinks About Chipotle's Plans
Analysts see CMG as a long-term top-growth stock. Its performance reflects the company's strong fundamentals and further growth prospects in the fast-casual dining space. The consensus recommendation from more than two dozen analysts who cover Chipotle is a Strong Buy. This includes Barclays Capital, Guggenheim Securities, Wells Fargo, Raymond James, Piper Sandler, and JP Morgan. The average 12-month price target over the past three months is $3,263.27. With over 3,300 Chipotle locations in the U.S., Wall Street sees future growth potential for this wildly popular restaurant chain.
Julie has no positions in any of the stocks mentioned. Stocks.News has no positions in any of the stocks mentioned. Please see our disclosure page for more information.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...