Chipotle Mexican Grill (NYSE:CMG) stock gained about 5% in Tuesday’s extended trading session after the company revealed plans for its first-ever stock split. CMG said that its board of directors has approved a 50-for-1 stock split. The company is looking forward to receiving shareholders’ approval for the split at the upcoming annual meeting on June 6, 2024.
CMG is a fast-casual restaurant chain known for its customizable Mexican cuisine made with fresh ingredients.
On receiving shareholders’ consent, the split shares would start trading on June 26, 2024. Further, each CMG investor of record as of June 18, 2024, will receive 49 additional shares for each share held. The company stated it is undertaking the stock split to enable more employees and investors to purchase its shares.
Interestingly, the stock split would be one of the biggest among all the companies in the S&P 500 Index (SPX). In 2022, Amazon (AMZN) and Alphabet (GOOGL) announced a 20-for-1 split.
Is CMG Stock a Buy?
The company’s top line is benefiting from new store openings, higher menu prices, and a focus on digital initiatives. However, the impact of inflation on food and labor costs might hurt bottom-line numbers to some extent.
On TipRanks, Chipotle has a Moderate Buy consensus rating, which is based on 20 Buy and eight Hold ratings. After a nearly 74% rally in its share price, the analysts’ average price target on CMG stock of $2,744.11 implies a 1.9% downside risk.
