Share Buybacks Could Hurt Corporate Cash Flows, Moody's Says
- Moody’s report sees companies not paying down growing debt
- Report suggests some tax law benefits may be "losing steam"
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A recent wave of stock buybacks by large U.S. companies is likely to prompt shareholders to expect more in future years, possibly impeding a company’s ability to pay down its debts, according to a report by Moody’s Investors Service Inc.
Multinationals pivoted in the second half of last year to using cash freed up by the 2017 tax-code overhaul for share repurchases, instead of paying down debt, which they had done for the first six months of the year.