2025’s First Big Stock Split Isn’t the One You Expected

If you’re a fan of big-time stock splits, 2025 hasn’t been a great year, at least thus far. With the stock markets now in recovery mode, with new all-time highs just a few percentage points away, perhaps the second half will see a longer list of large-cap stock splits. Indeed, a number of stocks (many blue chips with four-figure prices) seem overdue for a cut to improve accessibility to retail investors with just a few hundred bucks to put to work.

In any case, it hasn’t been a complete stock-split drought so far this year. Though we’ve mostly had smaller, lesser-known firms engaging in splits, there is one notable name that’s poised to lead the pack for the larger-caps, with a big 15-to-1 split looming.

If you haven’t kept up with the stock splitters, you may have missed the March announcement that O’Reilly Automotive (NASDAQ:ORLY) stock will split at the market close on June 9, 2025. The stock, which goes for just shy of $1,400 per share today, will go for closer to $95 per share after splitting just in time for the summer season.

O’Reilly’s stock split could garner positivity, but don’t rush into the stock at these heights

As always, stock splits tend to be perceived by the market as good news, especially for the names with a significant amount of retail investor interest. And while stock splits don’t generate value, given investors are merely getting a larger number of thinner slices of the pie, splits can be viewed as a pretty big vote of confidence on the part of management.

For a stock like O’Reilly, which is up over 47% in the past two years and over 241% in the last five years, the split is a long time coming for the auto parts retailer that’s had little issue navigating this tariff-fueled climate. For investors, the big question is whether ORLY shares are better to buy before or after the big split.

Undoubtedly, for those who cannot afford to pay close to $1,400 for a single share, waiting after the split seems to be the only course of action. But for those looking to put big money to work, I’d still say there’s no rush to get in right here, especially since the firm stumbled on its first-quarter earnings, and given the stock is quite expensive, currently trading at 33.9 times trailing price-to-earnings (P/E). In my view, that kind of valuation demands solid results moving forward, leaving little room for error.

Plenty of tailwinds and bullish analysts riding behind the name

O’Reilly is a firm that stands to be affected by tariffs, given that a lot of the parts it sells come from other nations. That said, as tariffs impair one’s ability to buy a new vehicle, demand for aftermarket parts stands to heat up, as more Americans opt to fix and maintain their existing vehicles. Undoubtedly, buying a U.S.-made vehicle is an obvious way to upgrade without taking a tariff hit to the chin.

That said, if tariffs cause a recession and more inflation, keeping an old car just makes more economic sense than buying a new one, especially one that’s subject to additional levies. In any case, I’m a huge fan of O’Reilly as a pair of “shocks” for one’s portfolio through the rocky road of tariffs. With exceptional operators and a defensive, perhaps recession-resilient business model and an ambitious expansion plan underway, ORLY stock may very well be worth that premium valuation.

Personally, I’d be inclined to sit on the sidelines and wait for a pullback, which may follow the big June stock split. In any case, mark your calendars and add the name to your radar if you’re looking for a tariff-resilient firm that can actually hold its own in a Trump tariff-fueled economic environment. If you’ve been eagerly waiting for a lower share price in the name and can’t wait to finally initiate a position, I’m not against buying at less than $100 per share on a post-split basis come June. Just be ready for more turbulence as the firm attempts to follow up on its recent lukewarm quarter.

The post 2025’s First Big Stock Split Isn’t the One You Expected appeared first on 24/7 Wall St..