Stock splits are back in fashion. Here's why, and which companies could be next
Written by Emily J. Thompson, Senior Investment Analyst
Source: CNBC
- Stock Splits Making a Comeback:
- Walmart initiated a 3-for-1 stock split, followed by other companies like Williams Sonoma and Broadcom announcing splits.
- Notable stock splits in 2024 include Nvidia, Chipotle Mexican Grill, and Sony Group.
- Decline in Stock Splits:
- Stock splits were more common in the late 1990s but declined significantly over the years.
- After the financial crisis in 2008-2009, stock splits almost ceased.
- Reasons for the Decline:
- Institutional investors focusing on dollar value rather than shares contributed to the decline in stock splits.
- The market did not see an increase in stock splits even after recovering post-2010.
- Impact of Stock Splits:
- Academic studies suggest that stock splits can lead to increased trading volumes, improved liquidity, and a broader shareholder base.
- Changes in trading patterns post-stock splits may have subtle impacts on stock prices.
- Companies Opting for Stock Splits:
- Some companies are splitting stocks to make ownership more accessible to employees and retail investors.
- High-priced stocks like Chipotle, Broadcom, and Lam Research are among those opting for stock splits.
Analyst Views on TPL
Wall Street analysts forecast TPL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for TPL is 1050 USD with a low forecast of 1050 USD and a high forecast of 1050 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 345.780
Low
1050
Averages
1050
High
1050
Current: 345.780
Low
1050
Averages
1050
High
1050
About TPL
Texas Pacific Land Corporation is the landowner in the State of Texas with approximately 882,000 surface acres of land, principally concentrated in the Permian Basin. Its segments include Land and Resource Management and Water Services and Operations. The Land and Resource Management segment focuses on managing Company’s oil and gas royalty interest and surface acres located in 19 different countries. The Land and Resource Management segment encompasses the business of managing its approximately 882,000 surface acres of land and its approximately 207,000 NRA of oil and gas royalty interests, principally concentrated in the Permian Basin. This segment consists of royalties from oil and gas, revenues from easements, commercial leases and renewables, and land and material sales. The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. Its services include water sourcing and produced water disposal.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
