The WSJ reports that companies have announced $600 billion of share repurchase authorizations year-to-date. What percentage of that total authorization will be executed? The proof is in the pudding as they say and a share repurchase press release means zero until the company in question starts to execute on the authorization.
Announcing share repurchase authorizations is one thing. Actually executing share repurchase authorizations is quite another. Many companies announce share repurchase authorizations simply to boost the stock (especially after providing tepid earnings guidance), yet they have no real intentions of ever executing anything close to the full authorization. Calculating the ratio of “executed” to “announced” share repurchase authorizations at year-end would be an interesting exercise. My guess is that only a small percentage of the $600 billion in announced authorizations will have been executed by year-end 2023 and year-end 2024.
I would like to see the pace of M&A pick-up. However, given where the cost of capital is and given that would-be acquirers have little visibility into target company sales pipelines, it is difficult to come to terms on valuations where buyers and sellers are happy. Buyers will want to haircut valuations given limited macro visibility, while sellers will want something close to 2021 peak valuations.