“Companies do stock buybacks from the profits that they have earned and if stock buybacks are announced by a company then analysts account that in their estimates. More than trying to push EPS aove estimates, the main reason for buybacks by big corporates is investing in itself when company considers the price is right”
This is true. However, buybacks also can be viewed as a sign the company doesn’t see any worthwhile growth prospects for its cash. This is pretty common with extremely large companies. Still, buybacks are often a good sign, because minimally it says the company thinks its shares are worth as much or more than the market does.
