Home Depot share buyback program.
On Wednesday, December 6th, Home Depot has announced a share buyback program. The amount of stock purchase will be equivalent to $15 billion. Home Depot is expected to invest $8 billion in their share buyback program in 2017. With this kind of news, you could buy stock in Home Depot. On the other hand, could their timing of this purchase be a little too high given the market’s rise?
The CEO of Home Depot, Craig Menear, said: “The retail landscape is changing at unprecedented rates and we plan to invest for the future to address the evolving needs of our customers. We will accelerate our investments, while continuing to focus on delivering the value our shareholders expect from The Home Depot.”
The good news is Home Depot has reaffirmed its sales and earnings-per-share guidance for this year, hence why the huge share buyback program. The stock purchase definitely creates shareholder value. Their target annual sales is believed to be between $114.7 billion & $119.8 billion by the end of January 2021. Those are lofty numbers indeed.
It will be interesting to see what how the market will truly react to this news. As of now, the stock is down over 2%. This might downward action could be due to overall market conditions. If you believe in their path, then buy stock in Home Depot during this down day. I, personally, feel like this stock is overpriced as of now.