Rumors are swirling that pharmaceutical company Eli Lilly (LLY) will be the next major company to split its stock.
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The rumor mill is heating up after streaming giant Netflix (NFLX) just executed a 10-for-1 stock split. With LLY stock currently trading at an all-time high of $1,054.12 and a market capitalization of just under $1 trillion, a growing number of analysts and investors are calling for a stock split.
While a stock split doesn’t change the value of a company or the dollar amount of equity that each shareholder owns, it does reduce the share price and makes the stock more affordable, particularly for individual retail investors.
Previous Eli Lilly Stock Splits
Eli Lilly has previously split its stock on four occasions. However, the last stock split occurred in October 1997. Given that it has been nearly 30 years since the last split, many analysts say the timing is right for a new stock split given the company’s share price and market capitalization. LLY stock is also trading at a rich valuation of 51 times future earnings estimates.
Stock splits often come in bull markets when share prices run up a lot. Other notable companies that have split their stocks in recent years include Apple (AAPL), Nvidia (NVDA), Broadcom (AVGO) and Chipotle Mexican Grill (CMG).
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 20 Wall Street analysts. That rating is based on 18 Buy and two Hold recommendations issued in the last three months. The average LLY price target of $1,042.89 implies 0.75% downside from current levels.
