This year there has been quite a fuss about several large companies doing stock splits. However, in most cases, these stock splits have not served as major catalysts.
But some of these stocks could have big gains over the next 12 months. Here are three stock-split stocks that Wall Street says will rise anywhere from 33% to 133%.
Amazon (AMZN -2.18%) didn’t get much lift from its 1:20 stock split in June. Instead, shares of the e-commerce and cloud giant fell in the days following the split.
However, Wall Street remains bullish on Amazon’s prospects. The consensus price target for the stock reflects a 33% upside potential over the next 12 months.
How could Amazon generate such a strong return? The company’s e-commerce business faces challenges from inflation and supply chain disruptions. If those headwinds abate (which seems entirely possible), the prospects for Amazon’s largest business could improve.
Amazon’s biggest growth driver, however, is its Amazon Web Services (AWS) cloud-hosting segment. AWS should likely continue to grow regardless of what happens to the broader economy. However, barring a recession, that growth could be better than expected and lead to a strong rebound in Amazon stock.
2. Brookfield Infrastructure
It would be an exaggeration to say that no one paid attention Brookfield infrastructure‘s (GDP -1.55%) (BIPC 1.57%) 3-for-2 stock split in June. However, this deal definitely didn’t get the attention that stock splits from Amazon and other big companies got.
Brookfield Infrastructure has done what most other stock-split stocks haven’t, by posting a positive return so far in 2022. Analysts believe the infrastructure stock could also head much higher. The stock’s average one-year price target is 35% above the current share price.
Brookfield Infrastructure owns a diversified portfolio of assets around the world. Some of these assets, notably the 10,000-mile natural gas pipelines, may enjoy higher demand given the prevailing energy market momentum.
The momentum for the stock market could also continue to help Brookfield Infrastructure if current volatility continues. This stock is one that risk-averse investors should love. The company’s infrastructure assets generate reliable revenue. Brookfield Infrastructure also offers an attractive payout, which has grown at a compound annual growth rate of 10% since 2009.
Shopify (SHOP -6.26%) also did a stock split in June, giving shareholders 10 shares for every share they previously held. However, this split didn’t result in an increase in Shopify’s stock price.
2022 was a brutal year for Shopify. The stock is down more than 75% year to date. Macro concerns have hurt to some extent, leading to a slowdown in e-commerce growth. Shopify’s investments in other public companies whose share prices have fallen also helped the company post net losses.
However, Wall Street analysts are very bullish on Shopify. The consensus price target for the stock reflects a 133% upside potential.
What would it take for Shopify’s stock price to more than double in the next 12 months? A general stock market recovery would help enormously. That could see investors flocking back to growth stocks like Shopify.
Shopify continues to expand its platform with new services. If those efforts pay off by attracting a significant number of new merchants, Shopify’s stock price could make an impressive comeback.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has held positions at Amazon, Brookfield Infrastructure Corporation and Brookfield Infrastructure Partners. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool recommends Brookfield Infra Partners LP Units, Brookfield Infrastructure Corporation, and Brookfield Infrastructure Partners and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.