By Savyata Mishra

(Reuters) – Shares of Chipotle Mexican Grill (NYSE:) have been up practically 6% at $2960 premarket on Wednesday after the burrito chain’s board authorized a 50-for-1 inventory break up as the corporate appears to make the inventory inexpensive for potential buyers.

Shares of the California-based firm have rallied to report ranges over the previous yr, powered by robust earnings owing to stable demand for burritos and rice bowls amongst its comparatively wealthier buyer base.

A inventory break up lowers the worth of shares with out affecting the corporate’s valuation, making them extra inexpensive for particular person buyers.

If the break up is authorized on the upcoming annual assembly on June 6, Chipotle’s shareholders will obtain an extra 49 shares for every share held.

The inventory closed at $2,797.56 on Tuesday, making it the fourth-highest-per-share worth on the . Its market worth was $76.71 billion.

The break up, the primary in its 30-year historical past, “will make our inventory extra accessible to workers in addition to a broader vary of buyers,” stated Chipotle’s Chief Monetary and Administrative Officer Jack Hartung on Tuesday.

Primarily based on Tuesday’s closing value, the inventory would commerce at round $56/share after the break up. The corporate has round 27.4 million shares excellent.

“Chipotle’s inventory break up ought to ease liquidity within the inventory given how excessive the share value has risen over the previous years. In any other case, the economics of the enterprise stay simply as compelling,” stated Jim Sanderson, an analyst with Northcoast Analysis.

Its ahead price-to-earnings a number of (P/E), a standard benchmark for valuing shares, is 49.72, increased than trade friends together with Starbucks (NASDAQ:) and McDonald’s (NYSE:) which have a P/E ratio of 20.89 and 22.24 respectively.