Apple Inc.'s stock split taking effect Monday has created speculation over the issue's possible movements in the coming months. Historically, Apple's stock has increased by an average of 10.4 percent over a 12-month period after it splits. This time, analysts are considering a number of other factors that could indicate a much higher jump.
The 4-for-1 stock split will not directly increase or decrease Apple's market valuation. Each share, which closed at $501.49 per share Friday, will simply be divided by 4. This will lead to a per-share price of around $125 once the split takes effect.
While the split doesn't directly affect the stock's pricing, such a move does encourage more buying in it. The "post-split gain" is expected to occur within the coming days with several investment analysts now submitting their own takes on the stock's possible movements.
Analysts at Morgan Stanley have said Apple's stock typically outpaced the S&P 500 during its previous stock splits. The stock is expected to more or less move the same way this time. During its most significant stock split in 2014, when the company split its stock into seven, Apple outperformed the S&P 500 over the next six months.
The split coincided then with the release of the company's iPhone 6 model, which analysts said is the same scenario this year. Apple's decision to split its stock comes just days before the planned launch of its latest iPhone 12 lineup. During its 2014 stock split Apple's share price rose by more than 36.4 percent over the next year.
Given the significance of its latest release, which will be the company's first 5G-capable smartphone with an all-new design, this year's post-split gain is expected to be much higher. The overall consensus for Apple's stock performance in the coming months remains positive. The split itself will be a boon for investors and those who are holding onto the technology issue.
Apart from Apple, Tesla will also be splitting its stock this week. Google and Amazon are reportedly also considering the possibility of splitting their shares in the coming months to make their stock more affordable to investors and to increase trading liquidity.
