Investing

5 Stock Buybacks Just Too Large to Ignore

Jon C. Ogg

Published: March 20, 2016 9:55 am

Last Updated: January 13, 2020 11:44 am

The week of March 18 marked the fifth consecutive week of gains for the stock market. Now the Dow Jones Industrial Average and the S&P 500 are both somehow actually positive in 2016. While most companies have reported earnings and other key news, there are corporate governance events and annual meetings coming up. This is when many companies announce dividends, buybacks and other shareholder news. 24/7 Wall St. tracked five stock buybacks that were too significant to ignore during the past week.

In an effort to show how significant these buybacks are, we have included how each stock did around the news and for the week, as well as its analyst targets and its 52-week range. The market caps were also provided. These were this past week’s five share buyback announcements that were just too significant to ignore.

Bank of America Corp. (NYSE: BAC) added $800 million, a 20% increase, to its existing buyback authorization of $4 billion. It has been more restricted than it may have preferred in the past under the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR), but this seems to be a continued gradual loosening up of its ability to send cash back to shareholders. After shares closed up 2.9% at $13.79 on Friday, that gave Bank of America shares exactly a flat week. The stock has a consensus analyst price target of $17.38 and a 52-week trading range of $10.99 to $18.48. Its market cap is $142 billion.

Fifth Third Bancorp (NASDAQ: FITB) announced a new share repurchase authorization of up to 100 million shares. This plan replaces the previous authorization from 2014, which still had about 16 million shares remaining. With a share price of $17.36 at the end of the week, this would represent close to $1.7 billion for buybacks, versus a market cap of $13.6 billion. Apparently the Federal Reserve isn’t worried about it spending oodles of cash to shrink its float. Fifth Third closed up 2.2% at $17.36 on Friday, for a weekly loss of 0.23%. Its consensus price target is $19.71 and its 52-week range is $13.84 to $21.93.
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JPMorgan Chase & Co. (NYSE: JPM) added $1.88 billion or so to its buyback plan, a move that saved its weekly performance. The total market cap here is $221.5 billion, and while the $1.88 billion doesn’t sound massive against the market cap, it is actually on top of the $6.4 billion authorized for repurchase last year. JPMorgan’s consensus price target is $69.36 and the 52-week range is $50.07 to $70.61. After a 2.9% gain to $60.48 on Friday alone, this stock closed out the week up 1.9%, all said and done.

Oracle Corp. (NYSE: ORCL) had a positive earnings report last week that drove shares higher, closing up each day of the week after earnings. What was interesting is that Oracle almost downplayed a huge stock buyback by just mentioning in passing that it authorized the repurchase of up to an additional $10 billion of common stock under its existing share repurchase program. Oracle closed up 2.1% at $41.48 on Friday, but the gain for the week was actually 6.5%. Oracle received more positive analyst notes during the week for a consensus analyst target of $43.86, and the 52-week range is $33.13 to $45.24. As far as another $10 billion, Oracle’s market cap is $174 billion.

Williams-Sonoma Inc. (NYSE: WSM) announced a new $500 million stock repurchase program over the next three years, on top of a 6% increase in its dividend. The company believes the buyback and dividend are both commitments to return more capital to stockholders. Note that this is on top of the previous $750 million stock repurchase program from 2013. As of January 31, 2016, there was approximately $62 million remaining for future repurchases under the prior $750 million program, so its total new repurchase authorization will allow another $562 million to be spent. Williams-Sonoma shares closed up 1.8% at $56.73 on Friday, but that was down 2% for the week. The consensus price target is $63.30, the 52-week range is $47.33 to $89.38, and the market cap is $5.1 billion.