Corporate share buybacks are at a record high but capex and tax demands may slow the pace, says BofA

A four-week average of share buybacks hit a record of nearly $2 billion, according to research from Bank of America. But buybacks may slow down if companies put more cash into capital expenditures. Share repurchases by corporations reached record highs in March, but buybacks may slow if companies decide to swing their cash into capital expenditures or if they adhere to tax regulations stemming from the government's stimulus efforts, said Bank of America.

"This would be above 2018's peak $800 billion levels and nearly double 2020's depressed $500 billion levels, suggesting upside risk to our forecast for no net EPS impact from buybacks to the S&P," BofA said. "We see multiple tailwinds for capex including the cyclical rebound, a potential infrastructure bill and US re-shoring," or relocations by companies back in the US, Carey Hall said.that's expected to focus on investments including in roads, bridges, and broadband.

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