Apple stock split: When will AAPL shares split again?
The performance of Apple (AAPL) has been better than other tech stocks lately as the company’s financial results and the strength of its brand has played in its favour.
The downtrend prompted by a deteriorating macroeconomic backdrop in the US hit a short-term bottom in mid-June after the price tagged the $130 level. Since then, AAPL has been rallying and has managed to trim its yearly losses to just 4.3%, as of 12 August.
With the share price currently sitting just 8% away from hitting all-time highs again, is it a good time for Apple to consider a stock split? In this article, we discuss what a stock split is, whether it can happen soon and if it could boost the price of AAPL shares.
What is a stock split?
A stock split increases the number of a company’s outstanding shares. After a split, shares are worth a fraction of what they were. Current stockholders are entitled to receive the newly issued shares in proportion to the number of shares they possess at the moment.
The price of each share is reduced once the operation is completed. However, the value of the company’s equity or that of the investors’ holdings is not affected as their ownership is not diluted.
Apple has completed several stock splits in the past. On 28 August 2020, the company split its stock into four. This means that shareholders received three additional shares for every share of the company they owned after the AAPL stock split was completed and owned four shares in total as a result.
If the pre-split price was, hypothetically, $100 a share back then, the post-split price would be $25 – the result of dividing $100 by four.
Stock splits are typically performed to increase the stock’s liquidity by lowering its price. Common reasoning for this operation is that it could make the asset more accessible for retail investors with a lower investment budget. A stock split could incentivise traders to invest in low-priced stocks to build a diversified portfolio.
However, with the introduction of fractional shares and contracts for difference (CFDs), investors can now get exposure to virtually any listed stock by investing a much smaller initial amount.
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Apple stock split history
According to Apple’s investor website, the company’s stock has been split five times. Here are the dates and details of those Apple stock splits:
Since the 2014 stock split, shares have gained approximately 642% as Apple’s business has performed positively during that period and macroeconomic conditions have also been favourable.
Meanwhile, after the 2020 4-for-1 Apple stock split, the price of the shares has increased by 47.3%. These gains cannot be directly linked to the split.
When will Apple stock split again?
The Board of Directors of Apple has not indicated that they have the intention to split the company’s stock any soon. However, the stock price is nearing all-time highs again, and that could prompt the management to consider another AAPL stock split to remain an appealing portfolio addition to both retail investors and investment funds in terms of liquidity and per-share value.
The fact that Apple has done this five times in the past makes this step possible. A 4-for-1 split or even a 5-for-1 split could have lowered the price to the low $40s or $30s based on its current trading price (as of 12 August).
Will the Apple stock split boost its share price?
Stock splits have no impact on the company’s fundamentals such as the performance of its business or the health of its balance sheet. They also don’t provide any additional capital to the firm and they do not result in gains for investors.
However, stock splits tend to show short-term upticks in the price of some high-flying tech stocks, such as Shopify (SHOP), Google’s parent Alphabet (GOOG), Tesla (TSLA), as retail investors appear to be drawn to these events to speculate on price fluctuations.
Whether this will be the case for AAPL stock if a split does happen is unclear and there are no guarantees that the stock’s historically positive post-split performance seen in the past will repeat in the future.
That said, stock splits are typically a good indication of a company’s resilience. If the share price has risen to the point that a split becomes a good idea, it suggests the company has managed to increase its value significantly as a result of the positive performance of its core business.
Apple (AAPL) analyst sentiment
According to data compiled by MarketBeat, as of 12 August, the consensus recommendation for Apple stock stood at ‘moderate buy’ based on the opinion of 33 analysts. From that group, 24 rated the stock a ‘buy’, seven rated it a ‘hold’, and two believed the stock could be a ‘sell’.
Meanwhile, the average price target for Apple stock stood at $179.4 resulting in a 6.48% upside potential based on 11 August’s closing price of $168.49. The highest 12-month target was set at $210 and the lowest at $136 per share.
Since July 2022, analysts’ actions have been mixed as three firms – KeyCorp, Evercore ISI, and Citigroup –have boosted their price targets for Apple. Other analysts have lowered their forecasts for the stock including Wells Fargo, Morgan Stanley, Barclays, and Bank of America.
Morningstar analyst also believes broader hardware sales could slow as consumers deal with inflation rising and a potential recession looming.
If you’re interested in trading Apple stock after the split, follow the latest Apple stock split news and company updates. However, there is no guarantee that it could happen any time soon, as the company hasn’t expressed the intention to do so yet.
If you’re considering Apple as a potential asset to trade now, bear in mind that analysts’ forecasts can be wrong. Their projections are based on making a fundamental and technical study of the stock’s performance. Past performance is no guarantee of future results.
It’s important to do your own research and always remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never trade more than you can afford to lose.
FAQs
Will Apple stock split?
There is no news or indications that Apple will split its stock shortly. However, the Apple stock split history is favourable as the company has already done this five times in the past.
How many times has Apple stock split?
Apple has split its stock five times in 1987, 2000, 2005, 2014, and 2020.
When did Apple stock split?
The last time that Apple stock split was on 21 June 2020. On that occasion, the company approved a 2-for-1 split.
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