Introduction: While stock splits should not be the sole factor influencing investment decisions, they often accompany successful companies known for delivering consistent returns. In this article, we explore three stocks—Amazon (NASDAQ: AMZN), Celsius Holdings (NASDAQ: CELH), and Nike (NYSE: NKE)—that have a history of stock splits and are poised for promising growth in 2024.
1. Amazon (NASDAQ: AMZN): Economic Comeback and AI Integration:
- Amazon’s 20-for-1 stock split in 2022 marked its first split in over two decades, reflecting substantial stock price growth. The e-commerce and cloud computing giant has rebounded, maintaining a strong position in these segments. As the economy recovers, Amazon is expected to benefit from increased consumer spending and efficient restructuring initiatives.
- AI’s Role in Growth: Amazon’s strategic use of artificial intelligence (AI) tools in AWS and e-commerce positions it for outperformance in 2024. AI-driven advancements in advertising contribute to strong growth, with sales surging 26% in Q3 2023.
Analyst Outlook:
- Despite an 81% gain in 2023, Amazon’s stock is still 18% below its all-time highs. Analysts predict a potential 17% to 50% rise in the next 12 to 18 months, making it an attractive investment opportunity.
2. Celsius Holdings (NASDAQ: CELH): Global Growth Potential:
- Celsius Holdings, an energy drink maker, witnessed a 3-for-1 stock split in November 2023. With a remarkable 4,500% return over the last five years, the company’s focus on increasing product availability and brand awareness has contributed to its success.
- Partnership with PepsiCo: A pivotal deal with PepsiCo to utilize its extensive distribution network has been a driving force behind Celsius’s 104% year-over-year revenue growth. Analysts foresee an additional 41% upside potential, supported by the company’s expansion into Canada.
Forward Growth Expectations:
- Despite a high forward price-to-earnings (P/E) ratio of 56, Celsius’s international expansion may justify its valuation. Analysts anticipate a robust 55% annual earnings growth over the next five years, making it an appealing prospect for investors seeking emerging consumer brands.
3. Nike (NYSE: NKE): Enduring Blue Chip Performance:
- Nike, a stalwart in the sportswear industry, has executed seven 2-for-1 stock splits since its IPO in 1980. While a recent stock split is not imminent, the company’s solid track record and resilience in the face of industry challenges make it a classic blue-chip play.
- Earnings Growth and Recovery: Despite a 42% decline from its 2021 peak, Nike displayed a 21% increase in earnings per share in the most recent quarter. The company’s focus on improving gross margins and reducing inventory positions it for growth, reinforced by an anticipated economic recovery.
Analyst Confidence:
- Analysts are optimistic about Nike, with an average expected gain of 19% in 2024. Improved profitability, coupled with recovery prospects and favorable interest rates, positions Nike as a compelling investment choice.
Conclusion: While stock splits serve as indicators of historical success, the potential for future growth lies in the companies’ resilience, strategic initiatives, and market positioning. Investors eyeing Amazon, Celsius Holdings, and Nike have an opportunity to benefit from these factors, making these stocks worth considering in 2024
