Apple and Tesla After Their Stock Splits

The share splits of Apple and Tesla have taken place, so how does this affect the investment case for these tech giants? Morningstar analysts say both stocks still look rich

Susan Dziubinski 1 September, 2020 | 9:17AM

Tesla

The stock splits of Apple (AAPL) and Tesla (TSLA) have now taken place - what does that mean for investors? 

Nothing fundamentally changes with a company when it splits its stock; its market capitalisation remains the same, too. Companies usually split their stocks in an effort to make their share prices more attractive to individual investors, who may be put off by a too-high stock price. Read our guide to what is a stock split here, for more.  

Below, Morningstar analysts share their post-split fair value estimates for both stocks.

Apple Still Looks Expensive

"With the start of trading on August 31, Apple will have initiated a 4-for-1 stock split that does not change our fundamental valuation of the company," says Morningstar strategist Abhinav Davuluri. Apple has announced the split during its most recent earnings call in late July, shortly before it became the first company to ever reach a market value of $2 trillion.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Apple Inc106.84 USD-3.17
Tesla Inc442.15 USD4.42

About Author

Susan Dziubinski  Susan Dziubinski is senior product manager with Morningstar.com.

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