A record number of new capital return programs have been announced this earnings season, Barclays notes. Shareholder returns in some cases have been enough to offset some disappointing results. Mercedes gained 4.7% on Thursday with a €3 billion buyback and the potential for more — winning out over guidance for lower margins.
One of the reasons Mercedes wants more regular shareholder returns is to try to boost its valuation. Renault last week proposed its biggest shareholder payout in five years. European autos trade at depressed valuations compared to their own history and the Stoxx 600. And shareholder returns seem very prevalent this earnings season in traditional value sectors such as banks and energy.
Heather Burke is an editor for the Markets Live team for Bloomberg News, based in London.
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