S
&
P
500
share
repurchases
could
make
a
comeback
in
2024
with
the
help
of
the
Magnificent
7,
according
to
Goldman
Sachs.
The
firm
estimates
S
&
P
500
constituents
will
repurchase
their
shares
to
the
tune
of
$925
billion
this
year,
which
represents
a
13%
year-over-year
rise.
This
trend
is
forecasted
to
rise
another
16%
in
2025
to
more
than
$1
trillion
in
2025.
This
comes
after
S
&
P
500
buybacks
fell
14%
in
2023
due
to
little
earnings
growth,
high
cost
of
capital
and
macro
concerns,
according
to
a
Wednesday
note
from
Goldman
strategists
David
Kostin
and
Cormac
Conners.
When
companies
purchase
their
own
stock,
it
reduces
the
overall
number
of
shares
in
the
market.
This
creates
more
value
for
existing
shareholders
by
effectively
increasing
the
earnings
per
share.
Buybacks
could
rise
this
year
as
mega-cap
tech
companies
post
better-than-expected
earnings.
The
Magnificent
7
–
which
include
Alphabet
,
Amazon
,
Apple,
Meta
Platforms
,
Microsoft
,
Nvidia
and
Tesla
–
accounted
for
26%
of
S
&
P
500
repurchases
in
2023.
With
the
exception
of
Amazon
and
Tesla,
these
companies
bought
back
their
shares
in
the
fourth
quarter,
Goldman
found.
Buybacks
may
also
boost
the
companies’
stocks.
“Investors
have
rewarded
companies
for
engaging
in
share
buybacks
more
than
other
uses
of
cash
in
recent
months,”
the
firm
found.
Indeed,
Goldman’s
buyback
basket
outperformed
the
S
&
P
500
by
4
percentage
points
since
the
start
of
the
2023
fourth
quarter.
See
below
for
some
of
the
names
in
Goldman’s
share
repurchase
basket,
and
where
analysts
forecast
them
going
next.
Meta
was
a
new
addition
to
Goldman’s
buybacks
basket
last
fall.
The
company
recently
expanded
its
share
buyback
program
by
$50
billion.
As
of
Dec.
31,
2023,
Meta
had
$30.93
billion
of
authorized
shares
available
for
repurchase.
The
stock
has
surged
nearly
45%
year
to
date.
In
all,
53
out
of
62
analysts
covering
the
shares
rate
it
a
buy,
per
LSEG.
However,
the
consensus
price
target
implies
that
shares
could
slip
about
1%
from
current
levels.
META
YTD
mountain
Meta
Platforms
in
2024
Another
Magnificent
7
member
on
the
list
is
Apple
.
During
its
fiscal
first
quarter,
the
company
said
it
spent
close
to
$27
billion
on
dividends
and
share
repurchases.
Though
shares
of
the
iPhone
maker
are
off
by
12%
in
2024,
the
majority
of
analysts
remain
upbeat
on
the
stock.
Nearly
two-thirds
of
the
analysts
covering
Apple
rate
it
a
buy
or
strong
buy,
according
to
LSEG,
and
the
average
price
target
suggests
upside
of
18%
from
here.
Oil
companies
Marathon
Oil
and
Marathon
Petroleum
are
some
of
Goldman’s
other
buyback
picks.
Marathon
Petroleum
authorized
$5
billion
in
share
repurchases
last
October,
expanding
from
its
previous
authorization,
which
still
had
$4.3
billion
remaining
as
of
the
end
of
September.
Shares
of
the
energy
company
are
up
20%
in
2024.
However,
analysts’
price
targets
suggest
the
stock
could
fall
about
2%
from
here,
per
LSEG.
Meanwhile,
Marathon
Oil
has
underperformed
the
broader
market
this
year,
rising
only
2.2%
against
the
S
&
P
500’s
gains
of
more
than
8%.
The
company
repurchased
more
than
$1
billion
of
its
shares
in
2023.
MPC
MRO
YTD
mountain
Marathon
Petroleum
and
Marathon
Oil
in
2024
