, is expected to drive a 13 per cent increase in buybacks by S&P 500 companies to $US925 billion in 2024, according to Goldman Sachs.
“Earnings growth is the most significant driver of share repurchases at the index level, explaining about half of the year-to-year variation,” Goldman’s Cormac Conners said in a note.Goldman recently upgraded its S&P 500 earnings per share forecasts for 2024 to $US241 a share, up 8 per cent, and 2025 to $US256, up 6 per cent “due to the improving economic growth environment and stronger than previously expected mega-cap tech margins and earnings”.
One risk to his forecast, Mr Conners said, is the potential for more of the mega-cap techs to start paying dividends,“We recently found that large companies with stable earnings, high profit margins and cheap valuations are the most likely to initiate dividends,” Mr Conners said. “Using this framework, Alphabet and Amazon respectively rank as the first and eighth most likely Russell 3000 stocks to initiate a dividend.
Source: Entertainment Trends (entertainmenttrends.net)