U.S. companies are planning to buyback their own stock at a record pace this year amid market and economic uncertainty.
The value of announced stock buybacks in the U.S. reached $233.80 billion in April of this year, the second highest monthly total on record, according to data from Birinyi Associates. In ramping up their share repurchases, companies are returning cash to shareholders and providing support for their stock price at a time of turmoil due to tariffs and trade wars.
Data from Deutsche Bank shows a similar trend, revealing a historic surge in share repurchase announcements that are running at more than $500 billion over the last three months. Companies that announced plans to repurchase their shares during first-quarter earnings include Apple (AAPL), Visa (V), Wells Fargo (WFC), Delta Air Lines (DAL), and 3M (MMM).
Market Uncertainty
Most of the increased stock buybacks were announced in April and mark a change from soft share repurchases in March when many companies elected to hold cash amid rising trade tensions. But as extreme uncertainty from tariffs has ratcheted up, corporate America has turned to stock buybacks to help support their share price and retain stockholders.
Some analysts note that many companies are investing in share repurchases as they put off capital investments due to a lack of clarity about the future. Birinyi’s data shows that the level of planned stock buybacks today was only surpassed in April 2022 amid a bear market, when it stood at $242.70 billion.
In the last week alone, stock buyback announcements from S&P 500-listed companies surged by $119 billion. The benchmark S&P 500 Index is down 5% this year.
Is AAPL Stock a Buy?
The stock of Apple has a consensus Moderate Buy rating among 29 Wall Street analysts. That rating is based on 17 Buy, eight Hold, and four Sell recommendations assigned in the last three months. The average AAPL price target of $228.84 implies 14.82% upside from current levels.
