Nomura Securities on Retail/Specialty Stores: Stock Buybacks in Q1...What Are They Telling Us?
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Rating Trend:
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Today's Overall Ratings:
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Nomura Securities on Retail/Specialty Stores: Stock Buybacks in Q1...What Are They Telling Us?
Analyst, Aram Rubinson, said, "Buybacks are becoming increasingly important when it comes to investing in retailers. For the most part, go-go growth is a distant memory. Today, returning capital is all the rage."
Hardlines 1Q Takeaways
Advanced Auto Parts (NYSE: AAP) – Buyback was light, but in line with the company’s historical policy of buying only “opportunistically.” AAP announced a new buyback program, despite having $200MN remaining on a previous authorization.
Tractor Supply Co (Nasdaq: TSCO) – New to the repurchase camp, but already acting shrewdly. When the share price ran away from the matrix, buyback activity slowed.
Lowe's (NYSE: LOW) – Big buybacks in a small window. Not surprisingly, the shares peaked just as the window was closing and then recovered as the
window reopened. Time will tell if LOW is the only buyer.
Amazon.com (Nasdaq: AMZN) – A virtual stranger to the buyback market, AMZN has been quite active over the past two quarters. We think this serves to derisk the downside, especially given how well they’ve bought.
Softlines:
Macy's (NYSE: M) – Disappointing 1Q12 repurchase, but expect activity to accelerate. We project $1.2BN for F12.
Nordstrom (NYSE: JWN) – Almost no repo, but not for lack of cash. Investing in the business is their primary focus, but we expect more repo as year progresses.
Gap Inc (NYSE: GPS) – Tough to knock ‘em, given very high historical repo activity, but higher share count this year limits EPS upside if comps stay strong.
Abercrombie & Fitch (NYSE: ANF) – Repo up, but business down. Expect repo activity to slow.
Overall, Rubinson, expects stock buybacks on retailers that Nomura covers to be about equal to last year...approximately $25 billion. However, this year (FY12) is off to a little bit of a slower start.
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Analyst, Aram Rubinson, said, "Buybacks are becoming increasingly important when it comes to investing in retailers. For the most part, go-go growth is a distant memory. Today, returning capital is all the rage."
Hardlines 1Q Takeaways
Advanced Auto Parts (NYSE: AAP) – Buyback was light, but in line with the company’s historical policy of buying only “opportunistically.” AAP announced a new buyback program, despite having $200MN remaining on a previous authorization.
Tractor Supply Co (Nasdaq: TSCO) – New to the repurchase camp, but already acting shrewdly. When the share price ran away from the matrix, buyback activity slowed.
Lowe's (NYSE: LOW) – Big buybacks in a small window. Not surprisingly, the shares peaked just as the window was closing and then recovered as the
window reopened. Time will tell if LOW is the only buyer.
Amazon.com (Nasdaq: AMZN) – A virtual stranger to the buyback market, AMZN has been quite active over the past two quarters. We think this serves to derisk the downside, especially given how well they’ve bought.
Softlines:
Macy's (NYSE: M) – Disappointing 1Q12 repurchase, but expect activity to accelerate. We project $1.2BN for F12.
Nordstrom (NYSE: JWN) – Almost no repo, but not for lack of cash. Investing in the business is their primary focus, but we expect more repo as year progresses.
Gap Inc (NYSE: GPS) – Tough to knock ‘em, given very high historical repo activity, but higher share count this year limits EPS upside if comps stay strong.
Abercrombie & Fitch (NYSE: ANF) – Repo up, but business down. Expect repo activity to slow.
Overall, Rubinson, expects stock buybacks on retailers that Nomura covers to be about equal to last year...approximately $25 billion. However, this year (FY12) is off to a little bit of a slower start.
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