Chipotle (CMG) investors will notice a difference in their portfolios today as the burrito giant conducted a 50-for-1 stock split, marking the company’s first split ever and one of the largest in the history of the New York Stock Exchange.
Chipotle CFO Jack Hartung expressed his belief that this split will make shares more accessible to a broader range of investors, including employees. Shareholders who owned the stock as of the market close on June 18 received 49 additional shares for each one held. As a result, shares began trading on a post-split basis, with one share now worth 50 shares at around $65 per share.
Despite the split, Chipotle’s post-split stock price remains higher than when the company went public in 2006 at $22 per share. Analysts have mixed opinions on the impact of the split, with some seeing it as an opportunity for retail investors to enter the market while others cautioning about potential volatility.
TD Cowen analyst Andrew Charles believes Chipotle is well-positioned for future growth, with a price target of $72 on the stock. The company has seen a 43% increase in shares year-to-date, outperforming competitors like McDonald’s and Restaurant Brands.
In addition to benefiting investors, approximately 4,000 Chipotle employees will receive a special one-time equity grant to commemorate the stock split. The grant will vest over three years, and employees can also participate in the Employee Stock Purchase Plan to purchase shares at a discount.
Chipotle’s stock split comes amid a trend of companies conducting splits, with Nvidia and Walmart also recently splitting their stocks. Analysts suggest that stock splits are typically bullish for companies, with above-average returns one year later compared to the broader market.
Overall, Chipotle’s stock split marks a significant milestone for the company and its investors, providing new opportunities for growth and investment in the future.
