NEW YORK (TheStreet) -- Apple (AAPL - Get Report) has split its stock 7:1 meaning shares will trade in the low-$90's on Monday, instead of the over $600 a share prices investors have become familiar with. While Apple said the split will its shares "more accessible to a larger number of investors," it is likely best for investors to look beyond the move and focus on the company's sweeping software update and what looks like a busy second half for hardware launches.
Apple shareholders received six additional shares in the company on June 2 as a result of the stock split, which was announced with Apple's first quarter results on April, 23. Apple shares began trading on a split-adjusted basis on June 9.
Few sophisticated investors will make much of the stock split. The move has no bearing on Apple's revenue, or its overall profitability. Earnings per share (EPS) will, however, will now be spread across Apple's new share count. According to Bloomberg data, there are now 6.03 billion Apple shares outstanding, meaning that the company's market capitalization remains just north of $550 billion at pre-market trading prices of $92.20 a share.
Perhaps, the share-split will also pave the way for Apple to be included in the price-weighted indices such as the Dow Jones Industrial Average.
To get a sense of how immaterial the split is, UBS analyst Steven Milunovich barely mentioned the move when upgrading his earnings forecasts for Apple on Monday. Instead, Milunovich focused on the prospect Apple makes significant new hardware launches this year, including a potential iWatch and a refresh of the iPhone.
Milunovich believes an iWatch could add $6.5 billion to Apple's revenue in the company's fiscal 2015 earnings and $11 billion to fiscal 2016 earnings. That iWatch would also add between 15-cents and 30-cents to Apple's earnings per share in 2015 and 2016, respectively, while diluting profit margins by 30-to-40 basis points, the analyst said on Monday. He expects an iWatch to have a similar consumer reaction as the launch of the iPad a few years ago.
New iPhones could provide Apple another tailwind heading into year-end. The yet-to-be announced iPhone 6 and 6L could help Apple put a floor on smartphone margins. While falling iPhone 5s and 5c prices could slightly impact Apple's smartphone margins in fiscal 2015, Milunovich expects those margins to recover to 44% in 2016.
UBS rates Apple a "buy" with a $100 a share price target.
-- Written by Antoine Gara in New York.