This Analyst Makes the Bull Case for U.S. Equities
- Canaccord’s Reynolds says buybacks, M&A to boost stocks
- Goldman, Citi predicted less funding available for buybacks
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Equity investors can count on an increase in debt-funded share buybacks this year to help send U.S. stocks to record highs, according to a strategist at Canaccord Genuity.
Brian Reynolds says strong demand for corporate bonds and attractive valuations after the fourth-quarter rout in equities will encourage companies to take on debt and use the proceeds to reward shareholders or pursue mergers and acquisitions. He predicts buybacks will increase for a seventh straight year, even as the effect of tax cuts that fueled last year’s record bout of repurchases fades away.